Understanding Inflation: How Purchasing Power Changes Over Time
Inflation is the silent thief of purchasing power. A dollar today buys significantly less than a dollar 20 years ago. Understanding inflation is crucial for financial planning...
Inflation Calculator
Calculate purchasing power changes using historical CPI data
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Formula
Formula
Adjusted = Original × (CPI_new / CPI_old)
The calculator uses Consumer Price Index (CPI-U) data from the Bureau of Labor Statistics to compute purchasing power changes.
How to Calculate Manually
- 1 Enter the dollar amount you want to adjust
- 2 Select the starting year (base year)
- 3 Select the ending year (target year)
- 4 The calculator looks up CPI values for both years
- 5 Calculate ratio: CPI_target / CPI_base
- 6 Multiply original amount by ratio
- 7 The result shows equivalent purchasing power
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Reference Table
| Decade | Avg Annual Inflation | Cumulative Decade Inflation |
|---|---|---|
| 1910s | 9.8% | 155% |
| 1920s | -0.7% | -7% |
| 1930s | -1.9% | -17% |
| 1940s | 5.5% | 70% |
| 1950s | 2.0% | 22% |
| 1960s | 2.5% | 28% |
| 1970s | 7.4% | 104% |
| 1980s | 5.1% | 64% |
| 1990s | 2.9% | 33% |
| 2000s | 2.5% | 28% |
| 2010s | 1.8% | 20% |
| 2020s* | 4.9% | 27% |
Frequently Asked Questions
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What is CPI?
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How accurate is this calculator?
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What's the average inflation rate?
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