Inflation Calculator

This inflation calculator helps you understand how inflation affects the purchasing power of money over time. Calculate future values, present values, and purchasing power loss.

What is Inflation?

Inflation is the rate at which the general level of prices for goods and services rises, causing purchasing power to fall. When inflation occurs, each unit of currency buys fewer goods and services.

Calculation Types:

• Future Value: What will your money be worth in the future?
• Present Value: What was money worth in the past?
• Purchasing Power Loss: How much buying power will you lose?

Historical Inflation Rates:

• Low Inflation: 1-3% annually (target for most central banks)
• Moderate Inflation: 3-5% annually (common in growing economies)
• High Inflation: 5-10% annually (concerning but manageable)
• Hyperinflation: 10%+ monthly (economic crisis)

Impact on Investments:

Inflation erodes the real value of money over time. For example, if inflation is 2% annually, $100 today will only have the purchasing power of $98 next year. This is why investments need to outpace inflation to maintain real value.

Important Notes:

• Inflation rates can vary significantly over time
• Different goods and services may have different inflation rates
• This calculator uses compound inflation for simplicity
• Consider inflation when planning long-term financial goals