Inflation Calculator · Practical guide
How Fast Does Inflation Halve Your Money?
The rule of 72 says 24 years at 3%. Exact checks at 2%, 3%, and 4%, and what it means for your budget.
At a glance
The Short Answer
Use the rule of 72: divide 72 by the inflation rate to get the years until prices double — and your money's buying power halves. At 3% inflation that is 72 / 3 = 24 years; at 2% it is 36 years; at 4% just 18 years.
Interactive tool
Inflation Calculator
Enter your own values, then compare the result with the examples below.
Inflation Analysis
Checking the Rule Exactly
The rule of 72 is an approximation of the compounding formula (1 + rate)^years = 2. Exact results using the calculator's formula:
| Inflation Rate | Rule of 72 (Years to Halve) | Exact: $1,000 Buys After That Span |
|---|---|---|
| 2% | 36 years | $490.22 |
| 3% | 24 years | $491.93 |
| 4% | 18 years | $493.63 |
The rule slightly overstates the doubling time, so money keeps a hair more than half its value — close enough for planning.
Why It Is Really About Doubling
Money does not burn; prices climb. When the price level doubles, the same dollars cover half the basket. That is why the rule of 72 doubles as an inflation tool even though it is usually taught for investment growth: at 3% growth your savings double in 24 years, and at 3% inflation your expenses do too.
Putting It to Work
If you plan to retire in 25 years on today's $60,000 budget, assume costs roughly double at 3% — you will need about $125,600 a year to keep the same lifestyle. Enter any amount and span above to see the exact split between equivalent amount and remaining purchasing power.
Frequently Asked Questions
Is the rule of 72 exact?
No, it is a mental-math approximation. At 3% the true doubling time is 23.4 years versus the rule's 24 — it is most accurate near 8%.
How fast does money halve at 6% inflation?
The rule says 12 years; the exact compounding math gives about 11.9 years.
Does deflation work the same way?
In reverse — falling prices raise purchasing power. This calculator accepts rates of 0% and up; for deflation scenarios, a small positive rate is a conservative proxy.
When did US money halve fastest?
The late 1970s and early 1980s, when inflation peaked above 13% in 1980 — a rule-of-72 halving time of about 5.5 years.