An inflation calculator is a tool that calculates the difference in purchasing power of a currency over time due to inflation. It is based on the inflation rate, which is the rate at which the general level of prices for goods and services is rising and, subsequently, purchasing power is falling.
To use an inflation calculator, you typically enter an amount of money in a specific year and compare its value to the same amount in another year. The inflation calculator then calculates the inflation rate between the two years and provides the adjusted amount, which represents the equivalent value of the money in today's dollars. This tool is useful for understanding the impact of inflation on the value of money over time and making informed financial decisions.