# Inflation Calculator

This inflation rate calculator uses the official consumer price index (CPI) records published each month by the Bureau of Labor Statistics. Since 1913, inflation has averaged 3.22%, which caused an overall price difference of 2,670.81%.

You can use the form above to calculate inflation for any years from 1913 to 2021 (which is an estimate based on the latest monthly CPI data from the BLS).

## What is Inflation?

The inflation rate is the percentage increase in the average level of prices of a basket of selected goods over time. It indicates a decrease in the purchasing power of currency and results in an increased consumer price index (CPI). Put simply, the inflation rate is the rate at which the general prices of consumer goods increases when the currency purchase power is falling.

The current inflation rate for 2021 is 5.39% and if that number holds until next year, $100 would be equivalent to$105.39 in 2022.

Inflation from 1913 to 2021
Average inflation rate 3.22%
Cumulative price change 3.22%
Price difference ($100 base)$2,670.81
CPI in 1913 9.9
CPI in 2021 274.31

## USD Inflation Since 1913

The chart below shows the inflation rate from 1913 when the Bureau of Labor Statistics' Consumer Price Index (CPI) was first established.

Purchasing power is when you compare the value of currency between different years. The Consumer Price Index directly measures this against a basket of goods, and we can use that data to calculate how much the purchasing power of a dollar decreases over time.

Inflation and purchasing power are linked because as inflation takes place, the purchasing power of the dollar decreases. If deflation happens, then the purchasing power of the dollar increases.

In the chart below you can see how the value of the dollar is worth less over the 108 years from 1913 to 2021.

## Inflation Formula Example

Using the inflation rate formula, we can calculate all of the data used in this article, or for any years, to see the impact of inflation and purchasing power.

To calculate the inflation rate of $100 from 1913 to 2021, we use the following formula: $$\dfrac{ 1913\; USD\; value \times CPI\; in\; 2021 }{ CPI\; in\; 1913 } = 2021\; USD\; value$$ We then replace the variables with the historical CPI values. The CPI in 1913 was 9.9 and 274.31 in 2021. $$\dfrac{ \100 \times 274.31 }{ 9.9 } = \text{ \2,770.81 }$$$100 in 1913 has the same purchasing power as \$2,770.81 today.

To work out the total inflation rate for the 108 years between 1913 and 2021, we can use a different formula:

$$\dfrac{\text{CPI in 2021 } - \text{ CPI in 1913 } }{\text{CPI in 1913 }} \times 100 = \text{Cumulative rate for 108 years}$$

Again, we can replace those variables with the correct Consumer Price Index values to work out the cumulativate rate:

$$\dfrac{\text{ 274.31 } - \text{ 9.9 } }{\text{ 9.9 }} \times 100 = \text{ 2,670.81\% }$$