Inflation Calculator
Find out how inflation erodes purchasing power over time.
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Inflation Calculator
Use the formula and worked example below to calculate manually.
Overview
The inflation calculator shows how the purchasing power of a sum of money changes over time at a given inflation rate, helping you understand the real cost of future expenses and plan accordingly.
How to use this calculator
- Enter the current amount (the value today).
- Enter the expected annual inflation rate (India's long-run average is ~5–6%).
- Enter the number of years.
- The calculator shows the equivalent future amount and how much purchasing power is lost.
Understanding the inputs & results
Current value
The amount in today's money whose future purchasing power you want to measure.
Inflation rate
The annual percentage rise in the general price level. Uses CPI (Consumer Price Index) in India.
Future value (nominal)
The amount needed in the future to have the same purchasing power as the current value.
Purchasing power
What a given amount of money can actually buy. Inflation reduces this over time.
The formula
Future value adjusted for inflation
FV = PV × (1 + i)^n
PV = present value, i = annual inflation rate (÷100), n = years. To find today's value of a future amount: PV = FV / (1 + i)^n.
Worked example
₹50,000 today at 6% inflation over 10 years.
- FV = 50,000 × (1.06)^10 = 50,000 × 1.7908 ≈ ₹89,542.
- In 10 years, you need ₹89,542 to buy what ₹50,000 buys today.
✓ ₹50,000 today requires ₹89,542 in 10 years at 6% inflation — purchasing power falls by 44%.
Frequently asked questions
Tips & things to know
- Always plan retirement savings in future (inflated) rupees, not today's money.
- A 6% inflation rate cuts purchasing power by more than half in just 12 years.