How This Inflation Calculator Works
Inflation compounds like interest, but against you. Future value = amount × (1 + inflation rate)years: that is how much money you need later to buy what the amount buys today. Past value = amount ÷ (1 + inflation rate)years: that is what today's amount would have bought that many years ago. The calculator uses the single annual rate you enter for every year — a simplification, since real inflation varies year to year.
Future value = amount × (1 + i)n · Past value = amount ÷ (1 + i)ni = annual inflation rate, n = years. A single constant rate is assumed for all years.
Worked example: $10,000 at 3% inflation for 20 years. Future value = $10,000 × 1.0320 = $18,061.11 — you need $18,061.11 in 20 years to buy what $10,000 buys today. In reverse, $10,000 today is what $5,536.76 bought 20 years ago at the same rate.
Practical tips
US inflation has averaged near 3% over long periods but has run far above and below it for years at a time. Try 2% and 4% as well and see how much the answer moves.
A $60,000 salary today needs about $108,000 in 20 years at 3% inflation just to stand still. Retirement plans that ignore inflation overstate what they deliver.
Money earning 0% while inflation runs 3% loses about 26% of its buying power in 10 years. That is why even cautious savers usually hold some growth assets.
The Bureau of Labor Statistics publishes actual CPI inflation by year and category. This tool models a constant rate you choose; it does not reproduce the official CPI history.