Inflation Calculator
Understand how inflation erodes the purchasing power of your money over time.
How It Works
Inflation reduces what your dollar buys each year. Even at a modest 3% rate, prices roughly double every 24 years.
Future Value = Amount × (1 + rate)^years
Historical Inflation Rates
| US (1920–2023 avg) | ~3.2% |
| Fed 2% Target | 2.0% |
| 2022 Peak (US) | 9.1% |
Frequently Asked Questions
Inflation is the rate at which the general level of prices for goods and services rises over time, reducing the purchasing power of money. The US Federal Reserve targets ~2% annual inflation.
If your savings earn less than the inflation rate, your real purchasing power decreases. For example, at 3% inflation, $100,000 today buys only ~$74,000 worth of goods in 10 years.
Stocks, real estate, TIPS (Treasury Inflation-Protected Securities), commodities, and I-bonds are common inflation hedges. Holding cash or low-yield savings during high inflation periods erodes wealth.