Inflation Calculator

Inflation is the rate at which prices rise over time. A 3% annual inflation rate means a basket of goods that costs $100 today would cost about $103 next year on average. Inflation reduces the purchasing power of cash that is not earning a return at least equal to the inflation rate.

Future cost answers: if something costs $X today, how much will it cost in N years at this inflation rate? Purchasing power answers the inverse: if you'll have $Y in N years, how much is that worth in today's dollars? The two are linked: future cost = today × (1 + r)^n; purchasing power = future ÷ (1 + r)^n.

The U.S. long-run average is around 2 to 3%; specific periods vary widely. For planning, common choices are the Fed's 2% target, a 3% long-run estimate, or a higher near-term assumption during inflationary periods. The right answer depends on time horizon and what you are projecting. This calculator does not fetch live inflation data; you choose the rate.

No. Different categories inflate at different rates. Healthcare and education have historically risen faster than overall inflation in many countries; some electronics deflate. The calculator uses a single rate for simplicity. For specific big-ticket categories, consider using a category-specific rate.

Yes. Enter a negative inflation rate to model deflation. For example, -1% over 10 years means prices fall to about 90% of today, and purchasing power of a fixed amount rises. Deflation is historically rare and usually short-lived in developed economies.

Future value (FV) typically models money earning a positive return: 'how much will my $X grow to?' Inflation typically models prices rising or purchasing power decaying: 'how much less will $X buy?' They use the same compounding formula but answer different questions. Use the future value calculator for investment growth, this one for purchasing-power planning.