See what money will be worth in the future — or what past prices mean in today’s money.
Results are estimates for planning purposes and are not financial, medical, or professional advice.
How to Use the Inflation Calculator
Prices rise over time, so a dollar today buys less than it did years ago. This calculator projects what any amount will cost in the future at your chosen annual inflation rate, or converts a past or future amount back into today’s purchasing power.
- Enter the dollar amount you want to adjust, such as 1,000 dollars.
- Enter the average annual inflation rate as a percentage. The long-run U.S. average is near 3 percent.
- Enter the number of years between the two dates.
- Choose the direction: future value of today’s money, or today’s value of a past or future amount.
Inflation Calculator Formula
The calculator compounds your amount at the annual inflation rate you enter. The future value is the amount times (1 plus the rate) raised to the number of years. The reverse direction divides instead, converting an amount back into today’s purchasing power. Your rate should reflect real price history, which the government’s Consumer Price Index tracks year by year.
Future value = amount x (1 + r) to the power n, where r is the annual inflation rate and n is the number of years. Today’s value = amount divided by (1 + r) to the power n.
Example Calculation
Say you want to know what 1,000 dollars of today’s spending will cost in 20 years if inflation averages 3 percent. First compute (1.03) to the power 20 = 1.80611.
Then 1,000 x 1.80611 = 1,806.11 dollars. In the reverse direction, 1,000 dollars twenty years from now is worth 1,000 divided by 1.80611 = 553.68 dollars in today’s money.
Frequently Asked Questions
What is the Consumer Price Index?
The Consumer Price Index tracks the average price of a basket of everyday goods and services, from groceries to housing. It is published monthly and is the standard yardstick for measuring inflation.
What was one dollar in 1990 worth today?
About 2.40 dollars. A dollar in 1990 had the buying power of roughly two dollars and forty cents today, which shows how steadily prices have climbed over three decades.
Why do prices keep rising over time?
Growing economies, rising wages, and expanding money supply all push prices up gradually. Central banks actually target mild inflation of around 2 percent, since steady gentle rises are healthier than falling prices.
Does the inflation calculator account for wage growth?
No, it only adjusts for price changes. Wages have also risen over time, so the calculator shows purchasing power, not whether people felt richer or poorer in a given year.
What is the difference between inflation and hyperinflation?
Inflation is the normal gradual rise in prices of a few percent per year. Hyperinflation is an out-of-control spiral where prices double in weeks or months, usually caused by economic collapse.
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