Find out how inflation affects the value of money over time — past to present, or present to future.
| Year | Equivalent Value | Cumulative Inflation | Value Lost |
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Inflation is the rate at which the general level of prices for goods and services rises over time, which in turn causes the purchasing power of money to fall. For example, if inflation is 3% per year, something that costs $100 today will cost $103 next year. Over decades, even moderate inflation can dramatically reduce what a fixed amount of money can buy.
This calculator uses the standard compound inflation formula:
For example, $1,000 in 2000 with 3% average annual inflation would be worth approximately $1,806 in 2024 — meaning it now takes $1,806 to buy what $1,000 bought in 2000.
Purchasing power refers to the quantity of goods or services that a unit of currency can buy. As inflation rises, each dollar, peso, or euro buys less — meaning purchasing power falls. This is why a salary that doesn't increase with inflation effectively results in a pay cut.
Most central banks target around 2% annual inflation as a healthy rate — enough to encourage spending and investment, but low enough to keep prices stable. Rates above 5–6% are generally considered high, and anything above 10% is considered severe.
If your savings account earns less interest than the inflation rate, your money is losing real value over time. For example, if inflation is 4% and your savings earn 1%, you're effectively losing 3% of purchasing power each year.
The Consumer Price Index (CPI) is the most common measure of inflation. It tracks the average price of a basket of common goods and services over time. The inflation rate is typically reported as the percentage change in CPI from one period to the next.