Inflation Calculator
See how inflation impacts your money
Inflation Calculator
Personal FinanceResults
Inflation ImpactFuture Cost vs Purchasing Power
Scissors EffectYear-wise Breakdown
20 Years| Year | Future Cost | Purchasing Power |
|---|---|---|
| 1 | ₹1,06,000 | ₹94,340 |
| 2 | ₹1,12,360 | ₹89,000 |
| 3 | ₹1,19,102 | ₹83,962 |
| 4 | ₹1,26,248 | ₹79,209 |
| 5 | ₹1,33,823 | ₹74,726 |
| 6 | ₹1,41,852 | ₹70,496 |
| 7 | ₹1,50,363 | ₹66,506 |
| 8 | ₹1,59,385 | ₹62,741 |
| 9 | ₹1,68,948 | ₹59,190 |
| 10 | ₹1,79,085 | ₹55,839 |
| 11 | ₹1,89,830 | ₹52,679 |
| 12 | ₹2,01,220 | ₹49,697 |
| 13 | ₹2,13,293 | ₹46,884 |
| 14 | ₹2,26,090 | ₹44,230 |
| 15 | ₹2,39,656 | ₹41,727 |
| 16 | ₹2,54,035 | ₹39,365 |
| 17 | ₹2,69,277 | ₹37,136 |
| 18 | ₹2,85,434 | ₹35,034 |
| 19 | ₹3,02,560 | ₹33,051 |
| 20 | ₹3,20,714 | ₹31,180 |
Assumptions and methodology
Transparent calculation notes for Inflation Calculator.
Formula used
The calculator estimates how much future money is needed to match today's purchasing power.
Methodology
- Apply the selected inflation rate for each year.
- Calculate future nominal value.
- Compare future value with today's amount to show purchasing power impact.
Core assumptions
- Inflation stays constant for the full period.
- The same inflation rate applies to the user's spending basket.
- Amounts are nominal before tax or investment return.
Not included
- Real inflation can vary by category, city, and time period.
- Lifestyle changes and one-time expenses are not modeled.
About Inflation Calculator
Guide1What is Inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding the purchasing power of money over time. In India, inflation is measured primarily through the Consumer Price Index (CPI) and the Wholesale Price Index (WPI).
Understanding inflation is crucial for financial planning because it determines how much your money will be worth in the future. An investment that does not outpace inflation results in a real loss of purchasing power, even if the nominal value grows.
2How Inflation Affects Your Money
- Purchasing Power: ₹1,00,000 today at 6% inflation will buy only ₹55,839 worth of goods in 10 years
- Real Returns: If your investment returns 8% and inflation is 6%, your real return is only about 2%
- Goal Planning: A goal that costs ₹10 lakh today will cost ₹18 lakh in 10 years at 6% inflation
- Retirement Risk: Inflation is the biggest silent threat to retirement savings
3Inflation Formula
The future cost of goods after inflation is calculated as:
Future Value = Present Value × (1 + inflation rate)^years
To find the present value of a future amount:
Present Value = Future Value / (1 + inflation rate)^years
India's average CPI inflation over the past two decades has been approximately 5-7% per year, though it varies significantly across categories like food, housing, healthcare, and education.
4How to Use This Inflation Calculator
- Step 1: Enter the current cost of an item or your total expenses
- Step 2: Set the expected inflation rate (e.g., 6% for general, 10% for education)
- Step 3: Input the number of years into the future
- Step 4: See what the same goods or lifestyle will cost in the future