Inflation Calculator
See what a dollar amount from any year is worth today, or what today's dollars were worth in the past.
Disclaimer: This calculator is for general educational and informational purposes only. It does not constitute financial advice, investment advice, tax advice, or legal advice and is not a substitute for consultation with a qualified professional. No fiduciary or advisory relationship is created by your use of this tool. Results are estimates based on the inputs you provide, standard mathematical formulas, and publicly available data that may not be current and may not reflect your individual financial situation, applicable tax laws, or other relevant factors. Neither MayoCalc nor Cook Media Systems assumes any liability for losses, damages, or other consequences arising from the use of any information or results provided by this tool. Always consult a qualified financial advisor, certified public accountant, or attorney before making financial decisions. See our full
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What Is Inflation?
Inflation is the rate at which prices increase over time, reducing the purchasing power of money. If inflation averages 3% per year, something that costs $100 today will cost $103 next year and about $134 in 10 years. Conversely, $100 in 10 years will buy only about $74 worth of today's goods. Understanding inflation is essential for long-term financial planning because it erodes the real value of savings, salaries, and investment returns.
How to Use This Calculator
Enter a dollar amount and a time period (past or future). For past calculations, the calculator uses historical Consumer Price Index (CPI) data to show what past dollars are worth today. For future projections, enter an assumed inflation rate to see what today's dollars will be worth in the future, or what a future expense will cost in today's terms.
Future Value = Present Value x (1 + inflation rate)^years
Present Value = Future Value / (1 + inflation rate)^years
Why Inflation Matters for Your Money
If your savings account earns 4.5% APY and inflation is 3%, your real (inflation-adjusted) return is only about 1.5%. If you earn 2% and inflation is 3%, your money is actually losing purchasing power. This is why keeping large amounts of cash in a checking account earning 0.01% is a guaranteed loss of wealth over time. The Compound Interest Calculator and Investment Return Calculator can help you model returns that outpace inflation.
Inflation Calculator FAQ
What is the average inflation rate?
The long-term average U.S. inflation rate (measured by CPI) is approximately 3.0-3.3% per year over the past century. However, recent years have seen higher inflation (9.1% peak in June 2022) followed by a return toward the Federal Reserve's 2% target. For planning purposes, using 3% is a reasonable long-term assumption.
Should I use real or nominal returns when planning?
Either works as long as you are consistent. If you use nominal returns (e.g., 10% for stocks), plan for nominal future expenses (prices that have been inflated). If you use real returns (e.g., 7% for stocks after inflation), plan in today's dollars. Many financial planners prefer real returns because it is easier to think in today's purchasing power.