Inflation Calculator
Calculate the purchasing power of money over time. See how much \$1000 today was worth in the past.
About this calculator
Inflation is the steady rise in prices that makes each rupee buy less over time. This calculator shows the effect in two ways: what an amount you can buy today will cost in the future, and how much purchasing power you lose along the way.
It is useful for sizing a retirement corpus, planning for a child's education, or just seeing why money sitting idle quietly shrinks. Enter an amount, an average inflation rate and a number of years.
How to use it
- Enter the Initial Amount, the price of something today.
- Enter the average Annual Inflation Rate you expect.
- Enter the Number of Years.
- Press Calculate to see the future cost and the purchasing power lost.
The maths
Future cost = Amount × (1 + inflation)years. Purchasing power lost = 1 − 1 ÷ (1 + inflation)years. The loss is the share of today's buying power that disappears, which is why it is smaller than the rise in cost.
Worked example
1,000 today at 6% inflation for 10 years
| Growth factor | 1.0610 = 1.7908 |
| Same goods cost | 1,790.85 |
| Purchasing power lost | 44.2% |
Prices rise by 79%, but your money loses 44% of its buying power. The two percentages describe the same event from different sides.
Tips and common mistakes
- India's long-run consumer inflation has averaged roughly 5 to 6%. Use 6% for long plans unless you have a better estimate.
- Education and healthcare often inflate faster than the headline rate, so use 8 to 10% for those goals.
- Your investments must beat inflation to grow in real terms. A 6% deposit at 6% inflation earns nothing real.
- Taxes make it worse: post-tax return is what counts.
- Use the result to scale a goal. A ₹50,000 monthly expense today is about ₹89,500 in ten years at 6%.
Frequently asked questions
What inflation rate should I use?
India's retail inflation has averaged roughly 5 to 6% over the long run. For long goals, 6% is a sensible default.
What does purchasing power lost mean?
It is the percentage of today's buying power your money loses. At 6% over 10 years it is 44%.
Why is the loss smaller than the price rise?
Prices rise 79%, but your money is measured against the larger price, so you lose 1 − 1/1.79 = 44%.
Does this predict real inflation?
No. It applies a constant rate. Actual inflation varies year to year.
Can I use it to see the past?
Yes. Use a historical average rate to see what an old price would be today.
How do I beat inflation?
Invest in assets that have historically earned more than inflation over the long term, such as equity, and review them regularly.