Inflation Calculator

Use this free online inflation calculator to see how rising prices erode purchasing power over time. Enter an amount, an expected annual inflation rate, and a number of years to find both its future cost and its equivalent value in today's money.

How to Use the Inflation Calculator

  1. Enter the starting amount in the "Amount (₹)" field.
  2. Enter the expected yearly inflation rate in "Annual Inflation Rate (%)".
  3. Enter the time horizon in "Number of Years".
  4. Click "Calculate" to see the projected future cost and the equivalent today's value.

How the Calculator Projects Inflation

Inflation compounds in the same way interest does: each year's price rise is applied to prices that have already risen. The calculator uses one growth factor, (1 + rate ÷ 100) raised to the power of the number of years, and applies it in two directions.

  • Future cost: Amount × (1 + rate ÷ 100)^years. This is what something that costs the amount today is likely to cost in the future.
  • Today's value: Amount ÷ (1 + rate ÷ 100)^years. This is what a sum you will receive in the future is worth in today's money.

Worked Examples

A family spends ₹50,000 a month today. At 6% inflation, the same lifestyle will cost 50,000 × 1.06^20 ≈ ₹1,60,357 a month in 20 years, more than three times as much. This is why retirement planning has to target future expenses, not today's.

Looking the other way, a ₹1 crore corpus that you expect to have in 25 years would buy only what about ₹23.3 lakh buys today, if inflation averages 6%. A goal that sounds large in rupees may be modest in real terms.

The table shows how much ₹1,00,000 will be worth in today's money after different periods:

YearsAt 4% inflationAt 6% inflationAt 8% inflation
5₹82,193₹74,726₹68,058
10₹67,556₹55,839₹46,319
15₹55,526₹41,727₹31,524
20₹45,639₹31,180₹21,455
30₹30,832₹17,411₹9,938

At 6% inflation, prices roughly double every 12 years, and the purchasing power of a fixed sum roughly halves over the same period.

Choosing an Inflation Rate

In India, headline inflation is measured by the Consumer Price Index (CPI), published monthly by the National Statistics Office. The Reserve Bank of India's monetary policy targets CPI inflation of 4%, within a band of 2% to 6%. Actual inflation varies from year to year, so for long-term planning many people use an assumption of around 5% to 7%.

Your own inflation may differ from the national figure. Costs such as school and college fees, private healthcare and rent in large cities have often risen faster than the overall index, so it is sensible to use a higher rate when planning for education or medical expenses. Check the latest CPI data from MOSPI or RBI before settling on a number.

Inflation and Your Savings

Money only grows in real terms if it earns more than inflation. If a fixed deposit pays 7% and inflation is 6%, the real return is only about 1% a year, calculated as 1.07 ÷ 1.06 − 1, and it falls further once tax on the interest is deducted. Money kept in cash or a low-interest account steadily loses purchasing power.

  • Use the future cost to set targets for goals such as a child's education, a house or retirement.
  • Use today's value to judge whether a promised future payout, such as the maturity value of an insurance policy, is actually large.
  • Review your assumptions every year or two, since a small change in the inflation rate makes a big difference over long periods.

Frequently Asked Questions

Future Cost = Amount × (1 + Rate ÷ 100)^Years. Today's Value is the reverse: Amount ÷ (1 + Rate ÷ 100)^Years, which shows what a future sum is worth in present-day terms.

Future Cost tells you how much more today's amount will cost after N years of inflation. Today's Value tells you the opposite - how much that same rupee amount, if received N years from now, is actually worth in current purchasing power.

Many people plan with 5% to 7%, around the RBI's 4% CPI target and its 2% to 6% tolerance band. For education or healthcare goals, a higher rate is more prudent because these costs have often risen faster than general prices.

It is your return after allowing for inflation: (1 + return) ÷ (1 + inflation) − 1. An 8% return with 6% inflation gives a real return of about 1.9%, which is how much your purchasing power actually grows.

Yes. It applies one constant rate for the whole period. Real inflation goes up and down, so treat the result as an estimate based on an average rate.
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