Inflation Calculator
See what inflation does to your money — future cost of today's amount and today's purchasing power of a future sum, year by year.
About the Inflation Calculator
This inflation calculator answers both sides of the money-over-time question. Enter an amount, an expected annual inflation rate (6% is preset, close to India's long-run consumer inflation) and a number of years. It shows what today's amount will cost in the future — and, equally important, what a future amount is worth in today's purchasing power.
The maths is compound growth in reverse of investing: future cost = amount × (1 + rate)^years, and purchasing power = amount ÷ (1 + rate)^years. At 6% inflation, ₹1,00,000 of expenses today costs about ₹1,79,085 in 10 years, while ₹1,00,000 received 10 years from now buys only about ₹55,839 worth of today's goods. A year-by-year table makes the erosion visible.
Use it to reality-check financial plans: a retirement corpus that sounds huge today may be modest in 25 years; a child's college fee will not stay at today's price; and a salary hike below inflation is a real-terms pay cut. Pair it with the SIP calculator to check whether your investments are actually beating inflation after the comparison.
How to Use the Inflation Calculator
- 1Enter the amount of money you want to analyse.
- 2Set the expected annual inflation rate (default 6%).
- 3Enter the number of years.
- 4Read the future cost and today's-purchasing-power results, and scan the year-by-year table.
Frequently Asked Questions
How is the future cost of money calculated with inflation?
Inflation compounds like interest: future cost = today's amount × (1 + inflation rate)^years. At 6%, something costing ₹50,000 today costs 50,000 × 1.06¹⁰ ≈ ₹89,542 in 10 years. The same formula inverted — dividing instead of multiplying — gives how much purchasing power a fixed sum loses over the period.
What inflation rate should I assume for India?
India's CPI inflation has averaged roughly 5–6% over the last couple of decades, and the RBI targets 4% with a 2–6% tolerance band. For long-term planning, 5–6% is a common assumption for general expenses — but education and healthcare costs have historically inflated faster, at 8–10%, so use a higher rate when planning for those goals specifically.
What does inflation do to my savings over time?
It silently erodes them. Cash earning nothing loses about 6% of purchasing power a year at 6% inflation — ₹10 lakh under the mattress buys only about ₹5.58 lakh worth of goods after 10 years. Even a fixed deposit at 6.5% barely breaks even after inflation and tax, which is why long-term savers look to assets with higher real (inflation-adjusted) returns.
What is the difference between nominal and real returns?
Nominal return is the headline growth of your money; real return subtracts inflation to show growth in actual purchasing power. The approximation is real ≈ nominal − inflation: a 12% mutual fund return during 6% inflation is roughly a 5.7% real gain (precisely, 1.12 ÷ 1.06 − 1). Judge every long-term investment by its real return, not the nominal one.
How much will ₹1 crore be worth in 20 years?
At 6% average inflation, ₹1 crore received 20 years from now has the purchasing power of about ₹31.2 lakh today (1 crore ÷ 1.06²⁰). Flip it around and maintaining today's ₹1-crore lifestyle would cost about ₹3.21 crore in 20 years. This is why retirement targets must be set in future rupees, not today's.