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Inflation Calculator

Calculate historical US inflation using CPI data, or project forward to see how inflation destroys purchasing power over time.

Historical US Inflation

Uses historical Consumer Price Index (CPI-U) data provided by the US Bureau of Labor Statistics.

Enter values to see inflation effects

The Ultimate Inflation Calculator

Inflation is the most destructive, silent force in economics. It is a mathematical certainty that the purchasing power of fiat currency will degrade over time. What cost $1.00 a century ago now costs significantly more, not because the goods have improved, but because the unit of measurement (the dollar) has been mathematically devalued.

Our advanced Inflation Calculator utilizes historical CPI algorithms to show you exactly how inflation has destroyed purchasing power over the last century, and allows you to project how it will affect your retirement savings in the future.

The Mathematics of Devaluation

Inflation operates on the exact same mathematical curve as compound interest, but in reverse. It is an exponential decay function.

If inflation is running at a consistent 3% per year, it does not mean your money loses 3% of its original value every year. It loses 3% of its remaining value. Due to the mathematics of exponential decay, a 3% inflation rate will cut the purchasing power of your money completely in half in approximately 24 years (using the Rule of 72).

Use our calculator to ensure your investment returns are mathematically outstripping the rate of inflation.

Frequently Asked Questions

What causes inflation?

Inflation is mathematically driven by the money supply. When a central bank (like the Federal Reserve) prints more fiat currency, the total number of dollars in the economy increases. Because the supply of actual goods and services has not increased, each individual dollar loses its purchasing power, causing prices to rise mathematically.

What is CPI?

CPI stands for Consumer Price Index. It is a mathematical metric used by the government to track inflation. The government measures the cost of a 'basket' of common goods (milk, bread, gasoline, rent) every month to determine how rapidly the purchasing power of the dollar is degrading.

How does inflation affect my savings account?

Inflation is a silent tax on cash. If you keep $10,000 in a checking account that earns 0% interest, and inflation is running at 3%, you mathematically lose $300 of purchasing power that year without ever spending a dime. Your savings must earn a yield higher than inflation to simply break even.

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