Inflation Calculator
See how inflation erodes purchasing power over time.
Understanding the Calculation
Percentage calculations involve:
- Base Value: The original or total amount
- Percentage Rate: The proportion expressed as a percent
- Result: The calculated value based on your inputs
Common Formulas
- Finding a percentage: (Part ÷ Whole) × 100 = %
- Finding the part: Whole × (% ÷ 100) = Part
- Percentage change: ((New - Old) ÷ Old) × 100 = % Change
Practical Applications
Use percentage calculations for:
- Financial planning and budgeting
- Academic performance tracking
- Business metrics and KPIs
- Health and fitness goals
- Shopping and discount calculations
What Inflation Does to a Number
``
future value = present value × (1 + inflation)^years
`
At 3% inflation, $100 today needs to be $134 in ten years and $181 in twenty to buy the same
things.
| Inflation | Years to halve purchasing power |
|---|---|
| 2% | 35 |
| 3% | 23 |
| 5% | 14 |
| 8% | 9 |
Two consequences that change decisions:A "safe" savings account can lose money. 2% interest against 3% inflation is a 1% real
loss every year, guaranteed.
Salaries need inflation adjustment to be compared. A raise below the inflation rate is a
pay cut in real terms, and a 2015 salary compared with a 2026 one without adjustment is
comparing two different currencies.
Real return = nominal return − inflation. It is the only return that buys anything.
The Four Percentage Questions
Almost every percentage problem is one of these, and mixing them up is the most common
arithmetic error there is:
| Question | Formula | Example |
|---|---|---|
| What is X% of Y? | Y × (X ÷ 100) | 15% of 80 = 12 |
| X is what % of Y? | (X ÷ Y) × 100 | 12 is 15% of 80 |
| X is Y% of what? | X ÷ (Y ÷ 100) | 12 is 15% of 80 |
| % change from X to Y | ((Y − X) ÷ X) × 100 | 80 → 92 is +15% |
Percentage Points Are Not Percent
A rate moving from 4% to 5% is one percentage point, and a 25% increase. Both
statements are true and they are not interchangeable — headlines routinely use the smaller
one when reporting a rise and the larger one when reporting a fall.
Increases and Decreases Do Not Cancel
| Start | Change | Result |
|---|---|---|
| 100 | +50%, then −50% | 75 |
| 100 | −50%, then +50% | 75 |
| 100 | −20%, then +25% | 100 |
The reason is that the second percentage applies to a different base. To reverse a −20% you
need +25%, not +20%. This is why a stock that falls 50% must double to break even, and why
"we cut costs 30% then grew 30%" leaves you 9% down.Reversing a Percentage
To find the price before a 20% discount, divide by 0.8 — do not add 20%:
`
before = after ÷ (1 − discount)
$80 ÷ 0.8 = $100 ✓
$80 × 1.2 = $96 ✗
``
The same asymmetry applies to tax, tips, markups and platform fees.