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Finance

Inflation Calculator

Determine the purchasing power of money over time. Compare historical inflation rates from 1913 to 2025 using US Consumer Price Index (CPI) indexes, or project future inflation impacts.

About This Tool

This inflation and purchasing power calculator measures the changing value of the dollar using historical BLS Consumer Price Index (CPI) averages.

CPI Inflation Adjustment Equation

Amount_End = Amount_Start * (CPI_End / CPI_Start)

Calculates equivalent value by multiplying the original sum by the ratio of ending to starting Consumer Price Index values.

Examples

Historical Buying Power (1980 to 2025)

$1,000 in 1980 compared to 2025.

Result: Equivalent value of $3,865.29. Cumulative inflation of 286.53%. Average annual inflation rate of 3.07%.

FAQ

What is the Consumer Price Index (CPI)?

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is compiled and published monthly by the US Bureau of Labor Statistics (BLS).

How is average annual inflation calculated?

Average annual inflation is calculated using the Compound Annual Growth Rate (CAGR) formula on the Consumer Price Index difference: CAGR = (CPI_End / CPI_Start)^(1 / years) - 1.

Why does purchasing power drop over time?

As prices for goods and services rise due to economic variables (demand pull, cost push, money supply growth), a single unit of currency buys fewer goods. This reduction in the volume of goods a dollar can purchase is called the loss of purchasing power.

Important Note

Results are estimates for planning and education. They do not replace financial, tax, legal, or professional advice. Review assumptions before making decisions.

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