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US average ~2-3%, high inflation periods 5%+
ð äœ¿ãæ¹
- Select calculation type (PastâPresent or PresentâFuture)
- Enter the amount in dollars
- Enter the annual inflation rate (US average ~2-3%)
- Enter the start and end years
- View the inflation-adjusted amount and purchasing power change
âš äž»ãªæ©èœ
- âCalculate past money's present value
- âPredict current money's future value
- âPurchasing power change visualization
- âYear-by-year value breakdown table
- âCumulative inflation rate display
- âCustom inflation rate input
ð èšç®åŒ
Future Value = Present Value à (1 + Inflation Rate)^Yearsð¡ èšç®åç
- â¢Inflation is the decrease in purchasing power of money due to rising prices.
- â¢Example: At 3% annual inflation, $100 today will be worth about $134 in 10 years.
- â¢Conversely, $100 from 10 years ago is equivalent to about $134 today.
- â¢From a purchasing power perspective, what costs $100 today will cost $134 in 10 years.
- â¢The US average inflation rate is about 2-3%, though it reached 9.1% in 2022.
- â¢Due to compounding, long-term inflation impact can be larger than expected.
â ãããã質å
Q. What is inflation?
A. Inflation is the continuous rise in prices that decreases the purchasing power of money. The same amount of money buys fewer goods and services over time.
Q. Why was money worth more in the past?
A. Prices were lower in the past, so the same amount could buy more. For example, a gallon of gas cost about $1.15 in 1990 but over $3.50 today.
Q. What is the ideal inflation rate?
A. The Federal Reserve targets 2% annual inflation. Both too low (deflation) and too high inflation are harmful to the economy.
Q. How can I protect against inflation?
A. Savings accounts alone rarely beat inflation. Diversify investments across stocks, real estate, bonds, and other assets to seek returns above the inflation rate.
Q. Where can I find actual inflation rates?
A. The Bureau of Labor Statistics (BLS) publishes the Consumer Price Index (CPI) and inflation data. The Federal Reserve also provides economic data.
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