Inflation Calculator
Calculate the future value of money accounting for inflation, or find what past money is worth today.
Future Value
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Purchasing Power Loss
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Effective Inflation
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What is Inflation Calculator?
An inflation calculator shows how the purchasing power of money changes over time due to rising prices. In 'Future Value' mode it tells you how much a sum today will be worth in the future after inflation erodes it. In 'Past Value Today' mode it converts a past amount into today's equivalent. This is essential for retirement planning, salary benchmarking, and understanding real returns on investments.
How to use
- 1 Select 'Future Value' to find what today's money will be worth after inflation, or 'Past Value Today' to find the present equivalent of a past amount.
- 2 Enter the starting amount in the Amount field.
- 3 Input the expected or historical annual inflation rate (India's long-run average is around 5–6%).
- 4 Enter the number of years for the calculation.
- 5 The result shows the inflation-adjusted value, purchasing power lost, and the total inflation percentage over the period.
Formula
Example calculation
₹1,00,000 today at 6% annual inflation will require ₹1,79,085 in 10 years to buy the same goods. Your purchasing power effectively halves in about 12 years at 6% inflation — a stark reminder of why investments must beat inflation to create real wealth.
Frequently asked questions
What is India's average inflation rate?
India's CPI inflation has averaged around 5–6% per year over the past decade, though it has spiked higher during periods of global commodity price shocks. The RBI targets CPI inflation at 4% with a 2% tolerance band.
How does inflation affect my savings?
If your savings earn less than the inflation rate, your real purchasing power shrinks even as the nominal balance grows. For example, a 4% savings account return against 6% inflation represents a real loss of 2% per year.
What is the difference between CPI and WPI?
CPI (Consumer Price Index) measures price changes from the consumer's perspective and is the key inflation benchmark for households. WPI (Wholesale Price Index) tracks prices at the wholesale level and is more relevant for businesses and supply-chain analysis.
How do I protect against inflation?
Inflation-beating investments include equities, real estate, gold, and inflation-indexed bonds. A diversified portfolio with an allocation to equities historically outpaces inflation over long periods.
What is real return vs. nominal return?
Nominal return is the raw percentage gain on an investment. Real return subtracts inflation: Real Return ≈ Nominal Return − Inflation Rate. A 9% nominal return with 6% inflation gives a real return of approximately 3%.