Inflation Calculator
Find out how much goods and services will cost in the future and how much purchasing power your savings will lose due to inflation.
How it works
Inflation reduces the value of money over time. If inflation averages 6% per year, ₹1,00,000 today will require approximately ₹1,79,085 in 10 years to purchase the exact same basket of items. Conversely, keeping ₹1,00,000 in cash for 10 years at 6% inflation means its real buying power drops to ₹55,839.
Formula
FV = PV × (1 + r)^t
As prices rise by r% each year, money compounds in price requirement. What costs ₹100 today requires ₹100 × (1 + r)^t in t years.
| Symbol | Variable | Unit | Description |
|---|---|---|---|
| FV | Future value (cost in future) | ₹ | |
| PV | Present value (today's amount) | ₹ | |
| r | Annual inflation rate | decimal | |
| t | Time horizon | years |
Worked example
₹1,00,000 at 6% annual inflation over 10 years
- Current Amount:
- ₹1,00,000
- Inflation Rate:
- 6%
- Years:
- 10
r = 6 / 100 = 0.06. FV = 1,00,000 × (1 + 0.06)^10 = 1,00,000 × 1.790847 = ₹1,79,084.77. Future purchasing power = 1,00,000 / 1.790847 = ₹55,839.48 (44.16% loss in buying power).
Limitations
Personal inflation may differ depending on your spending habits, medical costs, education expenses, and city of residence.
Frequently asked questions
What is an average inflation rate in India?
Historically, consumer price inflation (CPI) in India has averaged around 5% to 7% per year, with RBI aiming for a medium-term target of 4% (±2%).
How do I protect my savings from inflation?
To beat inflation, your investments must generate a post-tax return higher than the inflation rate. Equities, mutual funds (SIPs), real estate, and inflation-indexed bonds typically provide real positive returns over long horizons.
What is the difference between future cost and future purchasing power?
Future cost answers: 'How much money will I need in the future to buy what ₹1 lakh buys today?' Purchasing power answers: 'What will ₹1 lakh in cash today actually be able to buy in the future?'
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Last reviewed: 2026-08-22.