U.S. Bureau of Labor Statistics — Consumer Price Index FAQ
BLS defines CPI as the average change over time in prices paid by consumers for a representative basket of goods and services.
Open official source →Financial education tool
Inflation & purchasing power calculator
Model how a constant hypothetical inflation rate changes the future cost of the same basket and the real purchasing power of keeping the same nominal dollar amount.
Inputs
Set a hypothetical inflation path
The model holds one annual inflation rate constant for the selected period. It is a scenario, not a forecast.
$
Use a dollar amount you want to translate across time.
%
A constant rate simplifies the math. Real inflation changes over time.
years
Estimated outcome
Same dollars, different purchasing power
Future cost of the same basket
$18,061
If today's basket costs $10,000.
Purchasing power of the same nominal amount
$5,537
Today-dollar equivalent after 20 years.
- Cumulative modeled price change
- 80.6%
- Purchasing-power loss
- 44.6%
- Modeled price multiplier
- 1.806×
These two outputs answer different questions. The future-cost figure asks how many future nominal dollars would be needed to match today's modeled basket. The purchasing-power figure asks what the same unchanged nominal amount would be worth in today-dollar terms under the same assumed inflation path.
Your scenario
How the same assumption compounds across time
The table keeps the amount and annual inflation assumption unchanged and varies only the horizon.
| Years | Future equivalent cost | Same nominal amount in today dollars | Cumulative price change |
|---|---|---|---|
| 1 | $10,300 | $9,709 | 3% |
| 5 | $11,593 | $8,626 | 15.9% |
| 10 | $13,439 | $7,441 | 34.4% |
| 20 | $18,061 | $5,537 | 80.6% |
| 30 | $24,273 | $4,120 | 142.7% |
Reference scenarios
What a $100 basket would cost under constant inflation assumptions
These are mathematical reference scenarios, not forecasts. Each row starts with a $100 basket today and compounds one unchanged annual inflation rate. The 2% row is included because the Federal Reserve's longer-run inflation goal is 2% as measured by the PCE price index; it should not be read as a prediction that inflation will remain at 2% every year.
| Constant annual rate | Basket after 10 years | Basket after 20 years | Basket after 30 years | $100 purchasing power after 30 years |
|---|---|---|---|---|
| 2% | $121.9 | $148.59 | $181.14 | $55.21 |
| 3% | $134.39 | $180.61 | $242.73 | $41.2 |
| 4% | $148.02 | $219.11 | $324.34 | $30.83 |
| 6% | $179.08 | $320.71 | $574.35 | $17.41 |
Formula basis: price multiplier = (1 + annual inflation rate)years. Purchasing power uses the reciprocal of that multiplier.
Methodology
How the inflation model works
The calculator compounds the selected annual inflation rate for the chosen number of years. Future equivalent cost is the current amount multiplied by that cumulative price factor. Purchasing power runs the relationship in the other direction by dividing the unchanged nominal amount by the same price factor.
A constant-rate model is useful for understanding compounding, but actual inflation is not constant. Published measures such as the Consumer Price Index and Personal Consumption Expenditures price indexes summarize broad baskets using specific methodologies; an individual household can experience a different mix of price changes.
Why price growth and purchasing-power loss are not the same percentage
If prices rise by a cumulative percentage, the purchasing power of a fixed nominal amount falls by a different percentage because the second calculation uses the reciprocal of the price multiplier. The calculator shows both rather than treating them as interchangeable.
What the result does not predict
The tool does not predict future CPI, PCE inflation, wages, investment returns, interest rates, or any household's actual cost of living. It also does not adjust for taxes, changes in consumption, substitutions, geographic differences, or income growth.
Official sources & definitions
Where the inflation concepts come from
The calculator's arithmetic is a constant-rate educational model. These official sources provide the definitions and policy context for CPI, PCE, and the Federal Reserve's longer-run inflation goal.
U.S. Bureau of Economic Analysis — PCE Price Index
BEA describes the PCE price index as a measure of prices paid for goods and services purchased by consumers in the United States.
Open official source →Federal Reserve — Why the longer-run inflation goal is 2%
The Federal Reserve states that its 2% longer-run inflation goal is measured by the annual change in the PCE price index.
Open official source →Source links verified October 2, 2026. The tool does not import or claim to reproduce official CPI or PCE data series.
Cite this calculator
Stable reference details
Vault of Money Editorial Team. “Inflation & Purchasing Power Calculator.” Vault of Money. Updated October 2, 2026.
https://vaultofmoney.com/tools/inflation-purchasing-power-calculator
For the fixed scenario table, link directly to https://vaultofmoney.com/tools/inflation-purchasing-power-calculator#reference-scenarios. For definitions and official source context, use https://vaultofmoney.com/tools/inflation-purchasing-power-calculator#sources.
Continue learning
Connect the calculation to the underlying concepts
Inflation and purchasing powerUnderstand what broad inflation measures do and do not tell you about real purchasing power.Core vs. headline inflationSee why removing food and energy changes interpretation without making one measure universally better.CPI vs. PCECompare two major U.S. inflation frameworks and why their weights and scope differ.Nominal vs. real returnsConnect inflation-adjusted purchasing power with the way investment returns are reported.