How to use this inflation calculator
- Enter the current amount — this could be a price, expense, or savings amount.
- Set the expected inflation rate (India's average is around 5–6%).
- Choose the time period in years.
- View the future cost (what the same goods/services will cost), the real value of your money, and how much purchasing power is lost.
What is inflation?
Inflation is the rate at which the general price level of goods and services rises, eroding the purchasing power of money. When inflation is 6%, what costs ₹100 today will cost ₹106 next year — and ₹179 in 10 years.
Inflation is measured by indices like CPI (Consumer Price Index) and WPI (Wholesale Price Index). For personal financial planning, CPI is most relevant because it tracks the cost of everyday goods and services.
Inflation formula
The first formula shows what today's money will cost in the future. The second shows what a future sum is worth in today's purchasing power.
Impact of different inflation rates
How ₹1,00,000 today changes over time at different inflation rates:
| Years | 4% inflation | 6% inflation | 8% inflation |
|---|---|---|---|
| 5 | ₹1,21,665 | ₹1,33,823 | ₹1,46,933 |
| 10 | ₹1,48,024 | ₹1,79,085 | ₹2,15,892 |
| 15 | ₹1,80,094 | ₹2,39,656 | ₹3,17,217 |
| 20 | ₹2,19,112 | ₹3,20,714 | ₹4,66,096 |
| 30 | ₹3,24,340 | ₹5,74,349 | ₹10,06,266 |
Frequently asked questions
Why should I care about inflation for financial planning?
If your investments don't beat inflation, you're effectively losing money. A savings account earning 3.5% while inflation is 6% means you lose 2.5% in real purchasing power every year. Long-term goals like retirement, children's education, and home buying need inflation-adjusted targets.
What investments beat inflation?
Historically, equities (12–15% long-term), real estate, and gold have outpaced inflation. Fixed deposits (6–7%) and savings accounts (3–4%) often barely match or underperform inflation after taxes.
Is food inflation different from overall inflation?
Yes. Different categories inflate at different rates. In India, food and healthcare inflation often exceed the CPI average, while electronics and clothing may deflate. For personal planning, consider which categories matter most to your lifestyle.
How does inflation affect loan repayments?
Inflation actually works in your favour for fixed-rate loans. Your EMI stays the same, but its real value decreases over time. A ₹20,000 EMI feels much lighter 10 years from now if your income grows with inflation.