Interest & Basics
Inflation Calculator
Calculate inflation impact
About the Inflation calculator
Free Inflation Calculator to calculate inflation impact on purchasing power over time. Understand how inflation affects money value, plan inflation-adjusted investments, and calculate future costs with our comprehensive inflation calculator.
How the maths works
Inflation Adjusted Value Formula
Future Value = Present Value × (1 + Inflation Rate)^Years- Future Value
- Amount needed in future
- Present Value
- Current amount/cost
- Inflation Rate
- Annual inflation rate
- Years
- Number of years
A worked example
Inflation Impact Example
| Current Cost | ₹1,00,000 |
| Inflation Rate | 6% per annum |
| Time Period | 10 years |
Future Cost: ₹1,79,085
How to use it
- Enter current cost or amount
- Input expected inflation rate
- Specify number of years
- Get future value and purchasing power loss
What it accounts for
- Calculate future cost of goods
- Understand purchasing power erosion
- Plan for inflation in investments
- Compare historical inflation impact
- Make inflation-adjusted financial plans
Why it is worth working out
- Better long-term financial planning
- Understand real vs nominal returns
- Plan adequate retirement corpus
- Make inflation-beating investment choices
Questions people ask
What does inflation do to my savings?
It reduces what a rupee buys. At 6% inflation, ₹1,00,000 today has the purchasing power of about ₹55,840 in ten years and ₹31,180 in twenty. A deposit paying 7% before tax, in a 6% inflation environment, is roughly treading water after tax.
What is the difference between nominal and real return?
Nominal is the number your statement shows. Real is what is left after inflation, and it is the only one that determines whether you can buy more than you could before. A 9% return with 6% inflation is a real return of about 2.8% — not 3%, because the correct calculation divides rather than subtracts.
Which inflation rate should I use for planning?
Headline CPI understates most middle-class household inflation, because education, healthcare and domestic help rise faster than the basket. For long-term goals, 6% is a reasonable general assumption, 8% to 10% for education, and 10% or more for medical costs.
How does the rule of 70 work?
Divide 70 by the inflation rate to get the years until prices double, which is the same as the years until your purchasing power halves. At 6%, about twelve years. A ₹50,000 monthly lifestyle needs ₹1,00,000 by then to stand still.
Read more on this
- Gold in a portfolio — what it does, and what it does not — Gold produces no income and has no earnings. That makes it a poor growth asset and an unusually good one at a specific job.
- Inflation is the only expense you never get a bill for — At 6% a year, half your purchasing power is gone in twelve years. Here is what that does to salaries, savings and retirement targets.
This calculator is for information and education. It is not financial advice — see the disclaimer.