Inflation Calculator

Calculate purchasing power changes and future prices due to inflation

What is it and how does it work?

Inflation erodes purchasing power over time: $100 in 1990 buys far less today because prices have risen. An inflation calculator lets you translate amounts across years using historical Consumer Price Index (CPI) data, showing how much a past sum is worth in today's money — or conversely, what today's amount would have been worth in the past. This is essential for comparing salaries, prices, investments and economic statistics across different periods.

The calculation is simple in principle: adjust by the ratio of CPI values between the two years. If CPI was 130 in 2000 and 310 in 2024, then $1,000 in 2000 is equivalent to $1,000 × (310/130) ≈ $2,385 in 2024. The result tells you the same basket of goods that cost $1,000 in 2000 would cost $2,385 in 2024, meaning real purchasing power halved in nominal terms.

Common use cases

• Salary comparison: a job offering $85,000 today compared to a $60,000 offer from 2010 — adjust the 2010 figure to today's dollars to see whether the new offer represents a real raise.
• Historical prices: what did a house listed at $45,000 in 1975 actually cost in real terms? Convert to today's dollars to compare with current property prices.
• Investment returns: subtract inflation from a nominal return to get the real return — a 7% gain during 4% inflation is only a 3% gain in purchasing power.

Frequently asked questions

What is CPI and why is it used for inflation?

CPI (Consumer Price Index) measures the average price of a representative basket of goods and services households buy. It's the most widely used inflation measure for adjusting consumer purchasing power. Other indices like PPI (producer prices) or PCE (personal consumption expenditures) serve different purposes.

Does inflation affect everyone equally?

No. CPI represents an average household. People who spend more on housing, healthcare, or education — categories that typically inflate faster — experience higher effective inflation than the headline CPI suggests.

What's the difference between nominal and real values?

Nominal values are the raw dollar (or currency) amounts at the time. Real values are adjusted for inflation to a common base year, letting you compare across time. A salary that went from $50k to $60k over 10 years of 20% cumulative inflation is actually flat in real terms.

Can I use this calculator for future projections?

You can enter an assumed annual inflation rate and project future purchasing power, but forecasting inflation is notoriously difficult. Use projections only as rough estimates — the further out, the wider the uncertainty.

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