Inflation calculator

Our inflation calculator helps you understand how the purchasing power of money changes over time due to inflation.

Page written by Ashlyn Brooks. Last reviewed on May 20, 2025. Next review due October 1, 2027.

This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

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Inflation affects the purchasing power of your money over time, making it an important concept to plan for. Whether you’re saving for business growth, budgeting for long-term company expenses, or evaluating past price changes, the Swoop inflation calculator helps you estimate how inflation influences the value of money over time.

With just a few inputs, you can determine how much a dollar today will be worth in the future or adjust past amounts to reflect today’s value. Use this tool to make smarter financial decisions and stay ahead of inflation’s impact on your savings and investments.

What is inflation?

Inflation is the rate at which the purchasing power of money decreases over time, leading to a general increase in the prices of goods and services. As inflation rises, the same amount of money buys fewer goods, making it essential for businesses and individuals to factor inflation into financial planning, investments, and savings.

How to use our inflation calculator

Our inflation calculator helps estimate how inflation impacts the value of money over time, whether looking into the future or adjusting for past inflation. Follow these steps to use it:

Select a calculation method – Choose either:
- Forward flat – Projects future value based on a set inflation rate.
- Backward flat – Adjusts past values to reflect today’s purchasing power.
Enter the amount – Input the value you want to adjust for inflation.
Adjust the inflation rate – Toggle the inflation percentage to match expected or historical rates.
Set the time frame – Choose the number of years for the calculation.
View your results – The tool will display the estimated future or past value based on the inflation rate entered.

How is Inflation calculated?

Inflation is typically calculated using the compound interest formula:

For example, if $100 is subject to an annual inflation rate of 3% for 10 years, the future value is:

100×(1.03)^10 = 134.39

This means that $100 today will have the same purchasing power as $134.39 in 10 years if inflation remains at 3% annually.

Why does inflation occur?

Inflation happens when the overall demand for goods and services outpaces supply, causing prices to rise. The main factors driving inflation include:

Demand-pull inflation – When demand exceeds supply, businesses raise prices.
Cost-push inflation – Higher production costs (e.g., wages, raw materials) lead to price increases.
Monetary policy – An increase in money supply (e.g., lower interest rates) can devalue currency, leading to inflation.
Government spending – Large-scale government expenditures can drive inflation.
Supply chain disruptions – Shortages in goods or raw materials raise production costs, leading to inflation.

Frequently asked questions

How does inflation affect me?

Inflation affects individuals and businesses by reducing purchasing power, increasing the cost of living, and impacting wages and savings. High inflation can make essentials like food, housing, and healthcare more expensive, while long-term investments may need adjustments to keep up with rising prices.

What’s the average inflation rate

The average annual inflation rate varies by country. In the United States, historical inflation has averaged around 3% per year. However, in times of economic uncertainty, inflation can surpass 5-10%, as seen in recent years.

What is hyperinflation?

Hyperinflation is an extreme and rapid increase in prices, often exceeding 50% per month. It usually results from economic instability, excessive money printing, or supply chain breakdowns. Examples include Venezuela (2010s), Zimbabwe (2000s), and Germany (1920s).