Inflation Calculator

Use FV = PV × (1 + i)^n, where i is the inflation rate and n is years. Example: ₹1 lakh today at 6% inflation, 10 years from now, will be worth ₹1.79 lakh — meaning what costs ₹1 lakh today will cost ₹1.79 lakh then. To go the other way (today's purchasing power of future money), divide instead: ₹1 lakh in 10 years has today's value of ₹1,00,000 / (1.06)^10 = ₹55,839. Inflation calculations are simple but powerful — they reveal how saving stagnant money quietly destroys wealth. The calculator handles both directions.

Subtract real return from nominal return. If your savings earn 7% but inflation is 6%, your real return is roughly 1%. ₹1 lakh today, in a 7% account for 10 years, grows to ₹1.97 lakh nominally. But ₹1.97 lakh in 10 years has today's purchasing power of about ₹1.10 lakh — so your real wealth gain is only ₹10,000. This is why parking long-term money in pure savings or low-yield FDs is a slow loss. To genuinely grow wealth, you need investments that beat inflation by a real margin. The calculator shows both nominal and real values.

₹1,000 today, at 6% inflation for 10 years, will be worth approximately ₹1,791 in nominal terms — meaning you'll need ₹1,791 in 2036 to buy what ₹1,000 buys today. Looked at the other way: ₹1,000 in your savings 10 years from now has today's purchasing power of about ₹558. India's long-term inflation has averaged 5-7%, so 6% is a reasonable planning rate. Higher-inflation periods (food, healthcare) erode value faster. The calculator computes both directions instantly. Use it for goals like education, weddings, or any large future expense planning.

Purchasing power loss = 1 − (1 / (1+i)^n). Example: 6% inflation over 15 years means purchasing power = 1 / (1.06)^15 = 0.4173. Loss = 1 − 0.4173 = 0.5827, or about 58%. So ₹100 today buys what only ₹42 buys in 15 years (in today's terms). If you parked ₹50 lakh in a savings account at 4% for 15 years, you'd grow it to ₹90 lakh nominally. But in today's purchasing power, that's worth only about ₹37.5 lakh — a real loss. The calculator quantifies this loss for any timeframe and inflation rate.

Inflation increases the future cost of your goal, so you need a bigger corpus than today's price. Daughter's wedding planned for 20 years from now, currently costing ₹15 lakh? At 6% inflation, the future cost is ₹48.1 lakh. Plan for ₹48 lakh, not ₹15 lakh. Always inflate the target before working backwards to the SIP or lump sum needed. Education inflation in India runs 8-10% (faster than general inflation), so use the relevant category-specific rate. Healthcare inflation is similar. The calculator includes a category-specific mode for goal planning.

For India, use 6% as a default long-term inflation rate — that aligns with RBI's target band and historical CPI averages. For specific categories: education 8-10%, healthcare 8-12%, lifestyle items 5-7%. For the US and developed economies, 2-3% is the standard assumption. Don't plan with 4%; you'll undershoot. Use the rate appropriate to the goal: a child's education at 9%, retirement living costs at 6%. Higher-inflation assumptions force conservative planning, which is safer. The calculator allows category-wise inflation inputs for accurate goal-based projections.

Simple comparison: real raise = nominal raise − inflation rate. If you got an 8% raise and inflation is 6%, your real raise is roughly 2%. More precisely, real raise = (1 + nominal) / (1 + inflation) − 1. For 8% nominal and 6% inflation: (1.08/1.06) − 1 = 1.89%. Track this every year. If your raises consistently lag inflation, your real wages are falling — even though your salary keeps growing on paper. Negotiate accordingly. The calculator runs the comparison for any year and shows the cumulative real-wage trend over multiple years.