Inflation Calculator

Inflation Calculator at a glance

What it does: See how inflation erodes purchasing power over time, and what a future sum is worth in today money. The formula and its assumptions explained.
Where it runs: Entirely in your browser — no data is uploaded
Works offline: Yes, once the page has loaded
Cost: Free, with no account and no usage limit
Category: Financial Calculators

How to use the inflation calculator

Enter an amount in today's money.
Enter an expected annual inflation rate.
Set the number of years.
Read both figures: what that amount will buy in future, and what it would cost then to buy what it buys today.

The formula

Future cost of today's basket:  FV = PV × (1 + i)ⁿ
Today's value of a future sum:  PV = FV / (1 + i)ⁿ

i = annual inflation rate as a decimal
n = years

Worked example. At 6% inflation, ₹1,00,000 of goods today costs about ₹1,79,000 in ten years. Put the other way, ₹1,00,000 received in ten years buys what about ₹55,800 buys today - it has lost roughly 44% of its purchasing power.

How quickly money loses value

Years	At 3%	At 6%	At 10%
5	86%	75%	62%
10	74%	56%	39%
20	55%	31%	15%
30	41%	17%	6%

Each figure is the purchasing power remaining from ₹100. At 6% - a plausible long-run figure for India - money left in cash retains under a third of its value over twenty years. This is why holding long-term savings in a current account is not a safe strategy but a slow and certain loss.

Nominal returns and real returns

The number that matters is the real return - what is left after inflation.

Approximate:  real ≈ nominal − inflation
Exact:        real = ((1 + nominal) / (1 + inflation)) − 1

A fixed deposit paying 7% with inflation at 6% delivers a real return of about 0.9%. After tax on the interest, it is very likely negative - you are paying for the privilege of keeping the money safe.

This reframes the risk question. Cash and fixed deposits carry no nominal risk and a near-certain loss of purchasing power. Equities carry substantial short-term risk and have historically been the more reliable way to preserve real value over decades. Neither is safe in every sense; they are exposed to different risks.

Your inflation rate is not the headline rate

Published inflation figures measure a basket of goods weighted for an average household. Yours is different, sometimes very different.

Categories that typically inflate faster than the headline: healthcare, education, insurance premiums, and housing in growing cities. Categories that inflate more slowly or fall: consumer electronics, clothing, telecommunications.

The practical consequence is that households with children in private education or significant medical costs experience meaningfully higher inflation than the published figure, and planning against the headline number understates what they need. Retirement planning in particular should assume a rate above the general index, because healthcare weighting rises with age.

Using this in real decisions

Salary negotiation. A raise below inflation is a real pay cut. Know the figure before the conversation.
Goal planning. A goal costing ₹20 lakh in today's money costs considerably more when it actually arrives - inflate it before deciding how much to save.
Insurance cover. A sum assured fixed twenty years ago is worth a fraction of its original value. Review it periodically.
Comparing offers. A fixed pension has a very different value from an inflation-linked one, and the gap widens every year.
Historical comparisons. Any statement about what something cost decades ago is meaningless without adjusting for inflation.

This is a calculator, not advice. It applies a standard formula to the figures you enter and assumes a constant rate of return, no taxes and no fees unless stated. Real markets do not behave that way. Nothing here is a recommendation to buy, sell or hold any investment — see our full disclaimer, and speak to a qualified adviser regulated in your jurisdiction before making a financial decision.

Frequently asked questions

For India, long-run averages are often cited around 5-6%; developed economies typically target 2%. Use a rate reflecting your own spending - if healthcare and education dominate your budget, assume higher than the headline figure.

Because the index is an average across a standard basket. If your spending is concentrated in fast-inflating categories such as healthcare, education or urban rent, your personal rate is genuinely higher.

The general principle is to hold assets whose value tends to rise with prices - equities and inflation-linked bonds are the usual answers over long horizons, though both carry risks of their own. Cash reliably loses real value. What is appropriate depends on your timeframe and circumstances, which is a question for a qualified adviser.

Falling prices. It sounds beneficial and is generally not: people postpone purchases expecting lower prices, demand falls, and debt becomes harder to service in real terms. Japan's prolonged deflation is the standard cautionary case.

Return after inflation. Approximately the nominal rate minus inflation; precisely, ((1 + nominal) ÷ (1 + inflation)) − 1. It is the only figure that tells you whether your money is actually growing.

Nothing you enter here leaves your browser

Inflation Calculator does its work in JavaScript running on your own device. The page loads once, and after that there is no upload step and no server involved — which matters here because your income, loan and savings figures are nobody else’s business.

You can verify this rather than taking our word for it: load the page, disconnect from the internet, and the tool keeps working. Our privacy policy sets out what is and is not collected, and this guide explains why the distinction matters.