Free Inflation Calculator
Calculate how inflation affects purchasing power over time. See future prices and real value of money with this free inflation tool.
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US average: ~3%/year
Future Cost
$134.39
What $100 today will cost in 10 years
Purchasing Power of $100
$74.41
Lost $25.59 in value
Formula
Future Cost = Amount × (1 + Rate/100)^Years | Purchasing Power = Amount ÷ (1 + Rate/100)^YearsHow the Inflation Calculator Works
This calculator shows two key things: what something costing a certain amount today will cost in the future (future cost), and how much your current money will be worth in future purchasing power. Both use compound interest math, since inflation compounds year over year.
Understanding Purchasing Power
Purchasing power is what your money can actually buy. When prices rise due to inflation, each dollar buys less. If inflation averages 3% per year, prices roughly double every 24 years. That $5 coffee today? It could cost $10 by 2050.
This is why it's critical to invest and grow your money — cash that sits idle is slowly losing value every year.
Inflation's Impact on Major Expenses
- Housing: Home prices have historically risen 3-5% per year, often outpacing general inflation
- Healthcare: Medical costs typically inflate at 5-7% annually — roughly double the general rate
- Education: College tuition has risen about 5-8% per year over the past several decades
- Groceries: Food prices generally track close to overall inflation at 2-4% per year
- Technology: Electronics often get cheaper over time due to improvements — one area where deflation is common
How to Protect Your Money From Inflation
- Invest in diversified index funds — the S&P 500 has returned ~10% annually over the long term, well above inflation
- Use a high-yield savings account — at least earn 4-5% on cash you need to keep liquid
- Consider real estate — property values and rents tend to rise with or above inflation
- Buy I Bonds or TIPS — government securities that adjust for inflation automatically
Use this calculator to see how inflation erodes your savings and plan accordingly. Even modest inflation has a dramatic long-term effect.
Frequently Asked Questions
What is a normal inflation rate?
The US Federal Reserve targets 2% annual inflation. Historically, US inflation has averaged about 3% per year. In recent years (2021-2023), inflation spiked to 5-9% before moderating. Anything above 5% is generally considered high inflation.
How does inflation affect my savings?
If your savings account earns 4% interest but inflation is 3%, your real return is only about 1%. Money sitting in a 0.01% savings account actually loses purchasing power every year. To beat inflation, you need investments that return more than the inflation rate.
How much will $100 be worth in 10 years?
At 3% average inflation, $100 today will have the purchasing power of about $74.41 in 10 years. That means something costing $100 today would cost about $134.39 in 10 years.
What causes inflation?
Inflation is caused by increased money supply, rising production costs, and strong consumer demand. Government spending, supply chain disruptions, and energy price increases also contribute. Central banks manage inflation by raising or lowering interest rates.
Should I invest in inflation-protected securities?
Treasury Inflation-Protected Securities (TIPS) and I Bonds adjust for inflation, guaranteeing your purchasing power. They're good for conservative investors. However, stocks and real estate have historically outpaced inflation by larger margins over the long term.