Inflation Calculator
Calculate how inflation affects the purchasing power of your money over time.
Historical US average: ~3%. Recent years: 2-7%
Future Value
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Original Amount
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Total Inflation Effect
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Cumulative Inflation
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Year by Year Breakdown
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Understanding Inflation
Inflation is the rate at which the general level of prices for goods and services rises, causing purchasing power to fall.
How Inflation Works:
- 3% inflation: Something costing $100 today will cost $103 next year
- Compounding effect: Inflation compounds, meaning prices grow exponentially over time
- Purchasing power: $1,000 today won't buy the same amount of goods in 20 years
Historical Inflation Rates (US):
- Long-term average: ~3% per year
- 1970s-80s: 6-13% (high inflation period)
- 2010s: 1-2% (low inflation period)
- 2021-2023: 4-9% (post-pandemic spike)
Why This Matters:
- Retirement planning: Your savings need to outpace inflation
- Salary negotiations: Cost of living increases
- Investment returns: Real returns = nominal returns - inflation
- Fixed income: Bond payments lose value over time
Disclaimer: This calculator provides estimates for informational purposes only and should not be considered professional financial, medical, or legal advice. Results may vary based on factors not accounted for.