Inflation Calculator
See how inflation affects the value of money over time
Your Inflation Adjustment
Understanding Inflation Over Time
The Inflation Calculator helps you determine the current-day value of money from a past year by adjusting for inflation. Whether you’re comparing salaries, prices, or investments, understanding inflation helps you make better financial decisions.
Did you know? A dollar in 1950 had the purchasing power of about $12 today due to cumulative inflation over 70+ years!
How Inflation Is Calculated
This calculator uses a simple compound interest formula to estimate inflation-adjusted value:
Adjusted Value = Original × (1 + inflationRate)^years
Default inflation rate used: 3% per year. You can customize this for more accurate historical estimates.
Historical Inflation Rates (U.S.)
| Decade | Avg Annual Rate | Notes |
|---|---|---|
| 1970s | 7.3% | High inflation due to oil shocks and economic policies |
| 1980s | 5.1% | Volatility but decline after aggressive Fed action |
| 1990s | 2.9% | Low inflation era |
| 2000s | 2.6% | Stable, despite dot-com bubble and Great Recession |
| 2020s | 4.5% (avg through 2023) | Rising costs post-pandemic |
Why Inflation Matters
- Purchasing Power: Even small inflation erodes real buying power over time
- Savings: Money kept in low-interest accounts often loses value to inflation
- Investments: Returns must beat inflation to grow wealth
- Wages: Salary increases must outpace inflation to represent real gains
Use our Inflation Calculator to understand how much things really cost in today’s dollars and plan your finances accordingly.