Inflation Calculator

Overview

The Inflation Calculator helps you compare the purchasing power of money across different years. Whether you're evaluating historical costs, adjusting a salary, or planning for long-term savings, this tool provides accurate inflation-adjusted calculations using compound interest formulas. It supports multiple currencies and allows manual or default inflation rates.

This calculator is essential for financial planning, economic analysis, and anyone interested in understanding how inflation affects money value over time. By entering an amount, start year, and end year, you can see how much more (or less) that same amount is worth today or in the future.

💡 What Is Inflation?

Inflation is the rate at which the general level of prices for goods and services rises, leading to a decline in purchasing power. As inflation increases, each unit of currency buys fewer goods and services. Over time, inflation can significantly affect savings, wages, and investment returns.

🌍 Supported Currencies

You can calculate inflation-adjusted values using various currencies including USD ($), EUR (€), GBP (£), INR (₹), and JPY (¥). While the calculator uses a fixed or custom annual rate, future updates may support official CPI-based rates per country.

📊 Inflation Trends

Inflation rates vary by country and era. In general:

• Developed countries have inflation rates between 1.5–3%
• Emerging economies may experience higher or volatile inflation
• Hyperinflation or deflation can occur in extreme economic conditions

For precise country-specific analysis, always refer to official central bank or government statistics.

Formula & Methodology

The inflation adjustment is calculated using the compound inflation formula:

Future Value = Present Value × (1 + r)^n

• Present Value: Amount at the starting year
• r: Annual inflation rate (as decimal)
• n: Number of years between start and end year

If the inflation rate is not provided, the calculator defaults to 2.5%, which approximates the average inflation rate in developed countries over several decades.

Example Calculation

Let’s say you want to understand how much $100 in 1990 is worth in 2024, assuming an annual inflation rate of 2.5%:

$100 × (1 + 0.025)^34 = $222.30

This means that $100 in 1990 is approximately equivalent to $222.30 in 2024, considering inflation.

Use Cases

• 📦 Price Comparison: Compare the cost of goods and services over decades.
• 💼 Salary Adjustment: Adjust past or future wages to match current purchasing power.
• 🧓 Retirement Planning: Estimate how inflation will impact long-term savings.
• 📉 Loan Evaluation: Evaluate how loan values depreciate due to inflation.
• 🏠 Real Estate: Understand historical property values in today’s terms.

FAQ