Inflation Calculator
Calculate the impact of inflation on the purchasing power of your money over time.
1913-1919: 9.8%
1920s: 0.0%
1930s: -2.0%
1940s: 5.4%
1950s: 2.2%
1960s: 2.5%
1970s: 7.1%
1980s: 5.6%
1990s: 3.0%
2000s: 2.5%
2010s: 1.8%
2020-2023: 4.9%
This chart shows how the value of $100 in 2000 changes over time due to inflation.
The blue line shows the nominal value (future value), while the red line shows the real value (purchasing power).
Amount
Enter the amount of money you want to calculate inflation for.
Start Year and End Year
Select the years you want to compare purchasing power between.
Inflation Rate Type
Choose between historical average rates or a custom rate you specify.
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Understanding Inflation
What is Inflation?
Inflation is the rate at which the general level of prices for goods and services rises, causing purchasing power to fall. It's typically measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service.
How is Inflation Measured?
In the United States, inflation is primarily measured by the Consumer Price Index (CPI), which tracks the prices of a basket of goods and services commonly purchased by households. The CPI is calculated by the Bureau of Labor Statistics (BLS) and is released monthly.
The Impact of Inflation
Inflation affects different people in different ways. It can erode the value of cash savings and fixed incomes, but can benefit borrowers who repay debts with money that is worth less than when they borrowed it. It also affects investment returns, as the real return on an investment is the nominal return minus the inflation rate.
Historical Inflation Trends
The United States has experienced varying levels of inflation throughout its history. The 1970s saw particularly high inflation rates, often referred to as the "Great Inflation," with rates reaching over 14% in 1980. In contrast, the 2010s saw relatively low inflation, averaging around 1.8% annually.
Protecting Against Inflation
There are several ways to protect your money from the effects of inflation:
- Invest in assets that tend to appreciate with or above the rate of inflation, such as stocks, real estate, or Treasury Inflation-Protected Securities (TIPS)
- Diversify your investment portfolio to spread risk
- Consider investments in commodities or precious metals, which sometimes serve as inflation hedges
- Regularly review and adjust your financial plan to account for changing inflation rates