Inflation Calculator

Inflation is the steady rise in prices that makes the same basket of goods cost more each year. This inflation calculator answers both halves of that question: what today's amount will cost you in the future, and what today's amount will actually be worth if it just sits idle. Enter an amount, an inflation rate and a time period above to see both figures instantly.

The two numbers are mirror images. If prices rise 6% a year, a ₹1,00,000 expense grows into ₹1,79,085 after ten years, while ₹1,00,000 kept in cash shrinks to ₹55,839 of today's buying power. That gap — the purchasing power you lose by not investing — is the real reason money left in a savings account quietly loses value.

How is inflation calculated?

Inflation compounds exactly like interest, in two directions. Future cost = amount × (1 + i)^years tells you what today's basket will cost later. Today's value = amount ÷ (1 + i)^years discounts a future sum back into today's rupees. Purchasing power lost is the gap between them as a percentage: (1 − 1 ÷ (1 + i)^years) × 100.

Take ₹1,00,000 at 6% inflation over 10 years. The growth factor is 1.06¹⁰ = 1.790847, so what costs ₹1,00,000 today will cost ₹1,79,085 in ten years. Conversely ₹1,00,000 ÷ 1.790847 = ₹55,839, meaning money left uninvested buys 44.16% less than it does now. Stretch that to 25 years and the same expense reaches ₹4,29,187 while your ₹1,00,000 falls to just ₹23,300 in today's terms — a 76.7% loss of purchasing power.

How to use this calculator

• Enter the amount you want to test — a monthly expense, an annual college fee, or a savings balance sitting in the bank.
• Set an inflation rate. India's long-run CPI has averaged roughly 5–6%, so 6% is a sensible default for general expenses.
• Choose the time period in years — the horizon of the goal you are planning for.
• Read the future cost when you are budgeting for a goal, and today's worth when you are judging whether idle cash is losing value.
• Use a higher rate of 8–10% for education and healthcare, which have historically inflated far faster than the headline index.
• Open the year-by-year table to see how quickly the two lines diverge — the split becomes dramatic after about year 12.

Inflation in India: what to assume

The RBI operates a flexible inflation-targeting mandate with a 4% CPI target and a tolerance band of 2% to 6%. Actual retail inflation has spent most of the past decade between 4% and 7%, spiking higher during food and fuel shocks. For general household planning, 6% is a prudent assumption — high enough to be safe without making every long-term goal look impossible.

Headline CPI hides the categories that matter most to families. Private school and college fees have compounded at roughly 8–10% a year, and medical costs at a similar or higher pace, which is why an education corpus built on a 6% assumption often falls short. The practical response is not to save more in a savings account but to invest in assets that clear inflation after tax: an FD at 7% taxed at the 30% slab returns about 4.9% net, which barely keeps pace with 6% inflation, while equity has historically delivered a real return over long horizons. Compare this calculator's output against an SIP or FD projection over the same period to see whether your plan is genuinely gaining ground.

Frequently asked questions