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Inflation Calculator

What today's expenses will cost in the future, and how much of your money's buying power inflation takes away.

Updated · By Niraj Kumar

How the Inflation Calculator works

Inflation compounds just as interest does. Prices rising 6% a year do not go up 60% in 10 years but 79%, because each year's rise builds on the last. Dividing by the same factor gives the other view: what a fixed sum will buy in the future, measured in today's money.

future cost = today's cost × (1 + i)ᵗ | real value = amount ÷ (1 + i)ᵗ
i
Yearly inflation rate as a decimal
t
Years
Real value
Buying power in today's money

Worked example

Household costs of ₹1,00,000 today, with prices rising 6% a year for 20 years.

  1. 1Growth factor: 1.06²⁰ = 3.2071
  2. 2Future cost: 1,00,000 × 3.2071 = ₹3,20,714
  3. 3Real value of ₹1,00,000 then: 1,00,000 ÷ 3.2071 = ₹31,180
  4. 4Prices double every 11.9 years at this rate

The same things will cost ₹3,20,714, and cash left idle will buy less than a third of what it does today.

Frequently asked questions

What inflation rate should I use for India?

CPI inflation has averaged about 5–6% a year over the past twenty years, and the RBI targets 4% within a 2–6% band. For long-term plans 6% is a common, slightly cautious choice. Education and healthcare costs have risen faster, often 8–10% a year.

What is a real return?

Your return after inflation. An FD paying 7% when inflation is 6% grows your buying power by only about 1% a year, and less after tax. That is why long-term savings usually need some equity to stay ahead.

Is this the same as the CPI calculator for past years?

No. This projects forward at a steady rate you choose. Converting a past price to today's money uses the actual CPI index for each year, which varies year to year.

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