Inflation Calculator
What today’s money will be worth later
Year-wise impact
| Year | Cost then | Value of today’s money |
|---|---|---|
| 1 | ₹1,06,000 | ₹94,340 |
| 2 | ₹1,12,360 | ₹89,000 |
| 3 | ₹1,19,102 | ₹83,962 |
| 4 | ₹1,26,248 | ₹79,209 |
| 5 | ₹1,33,823 | ₹74,726 |
| 6 | ₹1,41,852 | ₹70,496 |
| 7 | ₹1,50,363 | ₹66,506 |
| 8 | ₹1,59,385 | ₹62,741 |
| 9 | ₹1,68,948 | ₹59,190 |
| 10 | ₹1,79,085 | ₹55,839 |
Understand the result
About the Inflation Calculator
What is inflation, and why calculate it?
Inflation is the general rise in prices over time. At 6% inflation, something that costs ₹1,00,000 today will cost about ₹1,79,000 in ten years. The flip side is that money kept idle loses purchasing power: the same ₹1 lakh would then buy only about ₹56,000 worth of today’s goods.
This inflation calculator shows the future cost of anything at a chosen inflation rate, how much today’s money will be worth in the future, and — if you enter an investment return — the real, inflation-adjusted return and what your investment will be worth in today’s money.
How this calculator works
Inflation works exactly like compound interest, but against you. A cost of ₹1,00,000 growing at 6% a year becomes ₹1,79,085 in ten years — and the ₹1,00,000 sitting in your account buys only ₹55,839 worth of the same goods.
The figure that really matters is the real return: what your investment earns after inflation is stripped out. An 8% return during 6% inflation is not an 8% gain, it is roughly 1.9% of genuine purchasing power.
Formula
Future cost = amount × (1 + inflation)ᵗ Purchasing power = amount ÷ (1 + inflation)ᵗ Real return = (1 + return) ÷ (1 + inflation) − 1
Worked example
- ₹1,00,000 with 6% inflation over 15 years.
- Future cost = 1,00,000 × 1.06¹⁵ = about ₹2,39,656.
- The same ₹1,00,000 kept in cash would buy only about ₹41,727 worth of goods by then.
The future cost of ₹1 lakh
| Inflation rate | In 10 years | In 20 years | In 30 years |
|---|---|---|---|
| 4% | ₹1,48,024 | ₹2,19,112 | ₹3,24,340 |
| 6% | ₹1,79,085 | ₹3,20,714 | ₹5,74,349 |
| 8% | ₹2,15,892 | ₹4,66,096 | ₹10,06,266 |
The RBI’s target for consumer price inflation is 4%, within a band of 2% to 6%. For long-term planning, 6% is a common, slightly cautious assumption; costs such as education and healthcare have often risen faster.
Assumptions & important notes
What this calculator assumes
- Inflation is constant every year. In reality it moves with fuel prices, food supply and monetary policy.
- Your personal inflation may differ from the headline CPI — education and healthcare have historically risen faster than 6%.
- The real return formula uses the exact Fisher relation, not the rough “return minus inflation” shortcut.
Frequently asked questions
What inflation rate should I use for planning?
6% is a reasonable general assumption for India. Use 8–10% for education costs and healthcare, which have consistently risen faster than the overall index.
Why is real return not simply return minus inflation?
Because both compound. The exact formula is (1 + return) ÷ (1 + inflation) − 1. At low rates the shortcut is close; at high rates it overstates your gain noticeably.
Does this mean holding cash is bad?
Cash loses purchasing power steadily, so it is poorly suited to long-term goals. It remains the right place for an emergency fund, where availability matters more than return.
How do I calculate the future value of money with inflation?
Future cost = today’s cost × (1 + inflation rate)^years. For ₹50,000 at 6% for 10 years: 50,000 × 1.06¹⁰ ≈ ₹89,542.
What was India’s inflation rate historically?
Consumer price inflation in India has averaged roughly 5%–6% over the last couple of decades, with years well above and below that. Since 2016, the RBI has targeted 4% CPI inflation.
PaiseWise runs entirely in your browser — the figures you enter are never sent anywhere. Results are estimates for planning only, not financial, tax or investment advice.