Real-World Guide: How Discounts, Taxes, and Inflation are Calculated
Math isn't just for school. See how percentage formulas control your shopping, taxes, bills, and salary in the real world.
•5 min read
Read more →Inflation Rate Calculator
Calculate the inflation rate between two years or two prices. See how much purchasing power has been lost due to price increases.
Calculate Buying Power Loss & Rate of Inflation
Quick Answer
Inflation reduces the purchasing power of money over time. It is measured by the percentage increase in the Consumer Price Index (CPI). This calculator determines how much prices have risen and what your money is worth today compared to the past.
Inflation Rate Calculator
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Calculate Inflation
- Enter the starting CPI value (or old price of an item).
- Enter the ending CPI value (or new price).
- Calculate to find the inflation rate percentage.
Inflation Formula:
Inflation Rate = ((New CPI − Old CPI) ÷ Old CPI) × 100Understanding Inflation
Inflation is the rate at which the general level of prices for goods and services is rising. As inflation rises, every dollar you own buys a smaller percentage of a good or service.
Central banks attempt to limit inflation, and avoid deflation, in order to keep the economy running smoothly. A target rate is often around 2% per year.
How to Use CPI Data
To calculate the official inflation rate between two years, find the CPI (Consumer Price Index) value for those years.
Example:
- CPI in Year A: 240.0
- CPI in Year B: 252.0
- Calculation: (252 - 240) / 240 = 0.05
- Result: 5% Inflation
Real vs. Nominal Value
If your salary increased by 3% (Nominal Increase), but inflation was 5%, your Real Salary actually decreased by about 2%. This calculator helps you see those "invisible" losses.
Inflation Scenarios
CPI: 280 to 296.8
Result: 6.0% inflation
CPI: 100 to 103
Result: 3.0% inflation
Price: $1.00 to $1.05
Result: 5.0% inflation
CPI: 250 to 262.5
Result: 5.0% inflation
CPI: 150 to 147
Result: 2.0% deflation
Cost: $500 to $550
Result: 10% inflation impact
Index: 110.5 to 115.2
Result: 4.25% inflation
CPI: 200 to 204
Result: 2.0% inflation
CPI: 240 to 252
Result: 5.0% inflation
Basket: $120 to $130
Result: 8.33% inflation
Gas Index: 200 to 250
Result: 25% inflation
Rent Index: 150 to 165
Result: 10% inflation
Medical CPI: 400 to 420
Result: 5% inflation
Food CPI: 280 to 300
Result: 7.14% inflation
Overall: 290 to 298.7
Result: 3.0% inflation
Inflation FAQ
What is CPI?
The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is the most common metric for calculating inflation.
How does inflation affect my money?
Inflation reduces purchasing power. If inflation is 5%, a dollar today buys 5% less than it did a year ago. Your income must increase by at least the inflation rate to maintain your standard of living.
Can inflation be negative?
Yes, this is called deflation. It means prices are falling over time. While cheaper goods sound good, widespread deflation can signal a weak economy.
Is this the same as the government inflation rate?
Yes, if you use the official CPI numbers provided by the Bureau of Labor Statistics (BLS) or your country's central bank. You can also calculate your 'personal inflation rate' by tracking your own household spending.