Inflation Calculator
Calculate what a past amount is worth today, or what today's money will be worth in future years.
Purchasing Power of $1,000 Over Time (3% Inflation)
| Year | Nominal Value | Real Value (2025 $) |
|---|---|---|
| 2005 | $1,000 | $1,806 |
| 2010 | $1,000 | $1,558 |
| 2015 | $1,000 | $1,344 |
| 2020 | $1,000 | $1,159 |
| 2025 (today) | $1,000 | $1,000 |
| 2030 (projected) | $1,000 | $862 |
| 2045 (projected) | $1,000 | $642 |
Approximate values using 3% annual inflation. Past figures are estimates; future figures are projections.
Frequently Asked Questions
What is inflation?
Inflation is the rate at which the general level of prices rises over time, eroding the purchasing power of money. If inflation is 3% per year, something that costs $100 today will cost $103 next year. Over 20 years at 3% inflation, that same item costs $180. The US Federal Reserve targets 2% annual inflation as its long-term goal.
What was the US inflation rate recently?
US CPI (Consumer Price Index) inflation peaked at 9.1% in June 2022 — the highest since 1981 — driven by pandemic supply chain disruptions, fiscal stimulus, and energy price spikes. Inflation cooled significantly in 2023–2025, returning to the 2–4% range. The long-term average US inflation rate is approximately 3.1% per year since 1913.
What is the CPI (Consumer Price Index)?
The CPI measures the average change in prices paid by urban consumers for a basket of goods and services including food, housing, transportation, medical care, and education. The BLS publishes CPI data monthly. Core CPI excludes volatile food and energy prices to show underlying inflation trends. The Federal Reserve uses PCE (Personal Consumption Expenditures) as its preferred inflation measure.
How does inflation affect investments?
Inflation reduces the real (inflation-adjusted) return of investments. If your savings account earns 3% but inflation is 4%, your real return is −1% — you are losing purchasing power. Historically, stocks have outpaced inflation over long periods (real return ~7% for S&P 500). Treasury Inflation-Protected Securities (TIPS) are bonds explicitly indexed to CPI. Real estate has also been a traditional inflation hedge.
How do I calculate the inflation-adjusted value of money?
Future value formula: FV = PV × (1 + inflation rate)^years. Present value formula: PV = FV / (1 + inflation rate)^years. Example: $1,000 in 2005 at 3% inflation for 20 years = $1,000 × (1.03)^20 = $1,806. That means $1,000 in 2005 had the same purchasing power as $1,806 in 2025.