Inflation Calculator
The Same Number of Dollars, a Different Amount of Stuff
Inflation doesn't change how many dollars you have — it changes what those dollars can buy. A dollar amount that sounds identical across two different years can represent very different purchasing power, which is why comparing prices, salaries, or savings goals across time requires adjusting for inflation rather than comparing raw numbers.
The Formula
Present Value = Future Amount ÷ (1 + Rate ÷ 100)Years
The two modes are inverses of each other: one projects what today's amount will cost in the future under a given inflation rate, the other discounts a future amount back to what it's worth in today's purchasing power.
Why This Is More Than a Curiosity
- Retirement planning — a savings goal set in today's dollars needs to be inflated forward to know what the actual future balance target should be.
- Salary negotiations — a raise that doesn't outpace inflation is effectively a pay cut in purchasing-power terms.
- Historical comparisons — understanding what a price or wage from decades ago is "worth" in today's terms.
What $50,000 Today Costs in 20 Years
Even modest differences in the assumed annual inflation rate compound into large gaps over two decades:
| Annual Inflation Rate | Future Cost (20 yrs) |
|---|---|
| 2% | $74,297.37 |
| 3% | $90,305.56 |
| 4% | $109,556.16 |
| 5% | $132,664.89 |
The difference between 2% and 5% inflation on the same starting amount is roughly $58,000 over 20 years — a reminder that the inflation assumption matters as much as the return assumption in long-range planning.
How to Use This Calculator
- Choose the mode: Future Cost of Today's Money or Today's Value of Future Money.
- Enter the Current Amount or Future Amount, depending on the mode.
- Enter the Annual Inflation Rate you want to assume.
- Enter the Number of Years.
- Select Calculate to see the inflation-adjusted result.
Related Calculations
To see how a growth rate applies to an actual investment rather than prices, check the CAGR Calculator, or project a savings balance forward with the Savings Calculator.