Inflation Calculator
Inflation is the steady rise in prices, so money buys less over time. If something costs ₹1,00,000 today, it will cost more in ten years. This calculator shows both sides: the future cost of what you buy today, and how much your money will be worth in today's terms.
Last reviewed:
- What costs ₹1,00,000 today will cost
- ₹1,79,085
- Increase in cost
- ₹79,085
- ₹1,00,000 will buy only what this buys today
- ₹55,839
- Loss of purchasing power
- ₹44,161 (44.2%)
- Inflation is not the same every year or for every item. Education and healthcare costs often rise faster than the general rate.
Use it to set realistic targets for education, a wedding, retirement or any long-term goal.
How to use this calculator
- Enter an amount in today's money.
- Enter the yearly inflation you expect.
- Enter the number of years.
- Read the future cost and the reduced purchasing power.
Formula and variables
Future cost = Amount × (1 + i)^t Purchasing power = Amount ÷ (1 + i)^t
- i - yearly inflation as a decimal (6% = 0.06).
- t - number of years.
Worked example
Something that costs ₹1,00,000 today, with inflation of 6% a year for 10 years.
| Amount today | ₹1,00,000 |
|---|---|
| Inflation and period | 6% for 10 years |
| Future cost | ₹1,79,085 |
| Today's ₹1,00,000 will buy only | ₹55,839 worth |
- Growth factor = 1.06¹⁰ = 1.7908.
- Future cost = 1,00,000 × 1.7908 = ₹1,79,085.
- Purchasing power = 1,00,000 ÷ 1.7908 = ₹55,839.
What changes the result
- Inflation rate. Even a few percentage points more has a large effect over decades.
- Time. The longer the period, the greater the erosion.
- Category. Education, healthcare and housing often inflate faster than the general index.
- Real return. A return below the inflation rate means your money loses buying power.
Benefits and practical uses
- Set goals in tomorrow's money rather than today's.
- Understand why saving in cash loses value.
- Estimate how much to invest to stay ahead.
Assumptions and limitations
- A constant inflation rate every year.
- Your own personal inflation may be higher or lower than the national rate.
- No interest or investment returns on the money are included.
Frequently asked questions
What is inflation?
A general rise in prices, which reduces the quantity of goods and services one rupee can buy.
What inflation rate should I use?
Many people use 5 to 7 per cent for long-term planning in India. Check recent RBI and government releases and use a rate that matches the cost you are planning for.
How do I find the inflation rate between two prices?
Raise the ratio of the new price to the old price to the power of one over the years, and subtract one.
Is my savings account keeping up with inflation?
Only if its interest rate is higher than inflation, after tax. Otherwise the real value of your savings falls.
Does it show returns on investment?
No. For that, use the compound interest, SIP or lumpsum calculators and compare the result with inflation.
References
Page last reviewed on . This calculator gives estimates for planning only; it is not financial advice and not an offer from any lender.