Calculators

Inflation Calculator

What today's expenses will cost in the future, and how much of your money's buying power inflation takes away.

How it works

Inflation compounds just as interest does. Prices rising 6% a year do not go up 60% in 10 years but 79%, because each year's rise builds on the last. Dividing by the same factor gives the other view: what a fixed sum will buy in the future, measured in today's money.

future cost = today's cost × (1 + i)ᵗ | real value = amount ÷ (1 + i)ᵗ
i
Yearly inflation rate as a decimal
t
Years
Real value
Buying power in today's money

Worked example

Household costs of ₹1,00,000 today, with prices rising 6% a year for 20 years.

  1. 1Growth factor: 1.06²⁰ = 3.2071
  2. 2Future cost: 1,00,000 × 3.2071 = ₹3,20,714
  3. 3Real value of ₹1,00,000 then: 1,00,000 ÷ 3.2071 = ₹31,180
  4. 4Prices double every 11.9 years at this rate

The same things will cost ₹3,20,714, and cash left idle will buy less than a third of what it does today.

Frequently asked questions

What inflation rate should I use for India?

CPI inflation has averaged about 5–6% a year over the past twenty years, and the RBI targets 4% within a 2–6% band. For long-term plans 6% is a common, slightly cautious choice. Education and healthcare costs have risen faster, often 8–10% a year.

What is a real return?

Your return after inflation. An FD paying 7% when inflation is 6% grows your buying power by only about 1% a year, and less after tax. That is why long-term savings usually need some equity to stay ahead.

Is this the same as the CPI calculator for past years?

No. This projects forward at a steady rate you choose. Converting a past price to today's money uses the actual CPI index for each year, which varies year to year.

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