This calculator determines the average annual inflation rate between two prices over a specified time period. The formula calculates the compound annual growth rate (CAGR) of prices:
Inflation Rate = [(Ending Price / Starting Price)(1/Years) - 1] × 100
For example, if an item cost $100 five years ago and costs $125 today, the average annual inflation rate would be approximately 4.56%.
Inflation is the rate at which the general level of prices for goods and services rises, reducing purchasing power over time.
Understanding inflation helps you make informed financial decisions, plan for retirement, and evaluate investments to ensure they outpace inflation.
Yes! Our calculator supports 20+ currencies. The calculation works the same regardless of currency - it measures the percentage change in purchasing power.
Inflation erodes the real return on investments. To grow wealth, investments need to generate returns higher than the inflation rate.
The inflation rate is the average annual percentage increase, while cumulative inflation is the total price increase over the entire period.