Inflation Calculator
See how inflation erodes the purchasing power of your money over time.
Frequently Asked Questions
What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises over time, reducing purchasing power. If inflation is 3%, something that costs $100 today would cost $103 next year.
What is the average inflation rate?
In the United States, the long-term average inflation rate is approximately 3-3.5% per year. However, rates vary significantly — from near 0% to over 9% in recent decades.
How does inflation affect savings?
If your savings earn less interest than the inflation rate, your money loses purchasing power over time. For example, $10,000 in a 1% savings account loses value if inflation is 3%, as your real return is -2%.
What is the CPI?
The Consumer Price Index (CPI) is the most common measure of inflation. It tracks the average change in prices paid by consumers for a basket of goods and services including food, housing, transportation, and healthcare.