---
title: "Purchasing Power Calculator | Interest Grove"
description: "See how much buying power money loses to inflation, at a rate you choose or since any year from 1913 using the U.S. CPI-U annual averages."
url: https://interestgrove.bond/purchasing-power-calculator/
---

# Purchasing power calculator

Inflation doesn't take money out of your pocket; it makes each dollar buy less. See how much less, at a rate you choose or over real history since any year from 1913.

## Two ways to measure the loss

Purchasing power is what a sum of money can buy once inflation is taken into account. With a rate you choose, the calculator divides by the growth in prices. Since a past year, it uses actual prices instead: amount × CPI(start) ÷ CPI(end), from the BLS CPI-U annual averages.

Buying power after n years = amount ÷ (1 + i)^ni = yearly inflation rate. "Prices double in" = ln 2 ÷ ln(1 + i) years.

The coins shrink in area with what the money buys. Once prices have doubled, the same notes buy half as much.

Example: at 3% a year, after 20 years $1,000 buys what $553.68 buys today (1,000 ÷ 1.03^20), a loss of 44.6%. Kept as cash from 1980 to 2025, $1,000 bought only what $255.95 bought in 1980.

## Sources

- Investor.gov (U.S. Securities and Exchange Commission), glossary: [purchasing power](https://www.investor.gov/introduction-investing/investing-basics/glossary/purchasing-power).
- U.S. Bureau of Labor Statistics, [CPI-U, U.S. city average, all items, series CUUR0000SA0](https://data.bls.gov/timeseries/CUUR0000SA0): annual averages 1913–2025 for the "since a past year" option.

## Questions

**What inflation rate should I enter?**

Any rate you want to test; trying two or three shows how much the answer depends on it. For context, the CPI-U rose by about 3.16% a year on average from 1913 to 2025.

**Does money in a savings account lose buying power too?**

Only when its interest, after any tax, is lower than inflation. The real return calculator compares the two.

**Why not just subtract inflation each year?**

Because inflation compounds: each year's rise applies to prices that have already risen. Dividing by (1 + i)^n allows for that.