Inflation Calculator
See how inflation has changed the value of money over time. Enter an amount and two years to find the equivalent purchasing power — using official US CPI data from 1913 to 2025.
Purchasing power of $100 over time
Historical inflation by decade (US)
| Decade | Avg. annual inflation | $100 grew to |
|---|
Understanding inflation and purchasing power
When economists say "inflation is 3%", they mean prices on average rose 3% over the past year. That doesn't sound like much — but compounded over decades, even moderate inflation dramatically erodes purchasing power.
At a constant 3% annual inflation rate, something that cost $100 in 1990 would cost roughly $230 by 2025 — more than double in 35 years.
Why this matters for your money
Any money sitting in a low-interest account earning less than the inflation rate is losing purchasing power in real terms. This is why investing — in stocks, real estate, inflation-linked bonds, or other assets — is essential for preserving long-term wealth.
Frequently asked questions
What is inflation?
Inflation is the rate at which the general price level of goods and services rises over time, which means each dollar buys less than it used to. It's measured by the Consumer Price Index (CPI), which tracks a basket of commonly purchased goods and services.
What causes inflation?
Inflation has multiple causes: demand-pull (strong consumer spending outpacing supply), cost-push (rising input costs like energy or wages), and monetary factors (more money in circulation). Central banks like the Federal Reserve target around 2% annual inflation as healthy for the economy.
How does this calculator work?
It uses historical US Consumer Price Index (CPI) data from the Bureau of Labor Statistics, going back to 1913. It calculates the ratio between two years' CPI values and applies it to the amount you enter.
Why was $1 in 1950 worth so much more than today?
Over 70+ years, even moderate 3–4% annual inflation compounds dramatically. A dollar that lost 3.5% of its value every year for 70 years would be worth only about 9 cents of its original purchasing power. This is why long-term investing is so important — cash savings lose value in real terms over time.
Calculations use US Bureau of Labor Statistics CPI (All Urban Consumers) annual averages. Data may differ from current BLS figures. This is for educational purposes only.