What is the Inflation Calculator?
An inflation calculator shows two things: what something that costs ₹X today will cost in N years, and how much purchasing power a future ₹X has in today's money. Either way it makes the silent erosion of cash savings impossible to ignore.
Indian retail inflation averages 5–7% over long periods, which means money sitting in a savings account at 3.5% interest loses real value every year.
Formula
Future cost = Present × (1 + i)ⁿ · Today's value = Present ÷ (1 + i)ⁿ
- i — Annual inflation rate (decimal)
- n — Number of years
Step-by-step example
Setup: Today's ₹1,00,000, 6% inflation, 10 years.
- 1,00,000 × 1.06¹⁰ ≈ ₹1,79,085
- 1,00,000 ÷ 1.06¹⁰ ≈ ₹55,840
Answer: Future cost ≈ ₹1.79L · Today's value of future ₹1L ≈ ₹55,840
Frequently asked questions
Which inflation rate should I use?
For long-term planning, India's RBI targets 4% CPI. Conservatively assume 6%; for lifestyle expenses use 7–8%; for healthcare/education use 10–12%.
Do FDs beat inflation?
Rarely after tax. Equity over 7+ years usually does.