MyFinCards

Inflation Calculator

Inflation is two facts at once: the basket gets more expensive, and your money buys less of it. Most calculators show only the first, which reads as a price rise rather than a loss you are already taking. This page shows both, plus the return you need just to stand still. Checking a projection against it? Use the SIP calculator with the real return.

₹1,00,000
₹1,000₹1,00,00,000
6%
1%20%
5 Yr
1 Yr30 Yr
Cost today₹1,00,000
Same basket in 5 years₹1,33,823
What ₹1,00,000 will be worth₹74,726

What Survives, and What Does Not

Purchasing Power Retained

74.7%

Cash left alone loses ₹25,274 of its value

Those are the same fact twice: the basket costing ₹1,00,000 today will cost ₹1,33,823, and the ₹1,00,000 sitting in your account will buy what ₹74,726 buys now — 74.7% of what it does today. Most inflation calculators show only the first, which reads as a price rise rather than a loss you are already taking. At 6%, prices double every 11.9 years — the rule of 72 estimates 12.0.

To stand still you need a return above 6%, and the real return is not the difference between the two — they compound against each other, so (1 + nominal) = (1 + real) × (1 + inflation). A 12% return against 6% inflation is really 5.66%, not 6.0%. A 6% fixed deposit, taxed at your slab rate, is usually a real loss. Check a projection against inflation on the SIP or lumpsum calculator by entering the real return instead of the nominal one.

Worked Example: ₹1,00,000 Over 5 Years at 6%

Prices compound just like returns do. Over 5 years at 6% the multiplier is 1.065 = 1.338, so the cost is multiplied by that and the value of money is divided by it.

Costs today

₹1,00,000

the basket you are pricing

Will cost

₹1,33,823

₹1,00,000 × 1.338

Your money will buy

₹74,726

₹1,00,000 ÷ 1.338

Your inflation is not the headline inflation

CPI is a weighted basket for an average household. School fees, medical treatment, rent and domestic help have run well above the headline figure in India for years, while electronics and data have fallen. If your spending is weighted toward the first group, the honest figure to enter here is higher than the number in the news.

What this Calculator Does

It multiplies a cost by (1 + inflation) over the period to get the future price, and divides by the same factor to get what today's money will be worth. It also gives the exact doubling time beside the rule-of-72 estimate, and the real return that a nominal return actually delivers once inflation is compounded against it.

How to Use It

1

Set the amount — a cost today, or a sum of money you hold.

2

Set the inflation rate you want to assume.

3

Set how many years ahead you are looking.

4

Read both figures: what it will cost, and what your money will buy.

Your Inflation Is Not the Headline

CPI is a weighted basket for an average household. School fees, medical treatment, rent and domestic help have run well above the headline figure in India for years, while electronics and data have fallen. If your spending is weighted toward the first group, the honest rate to enter here is higher than the number in the news.

Expert FAQ

Frequently Asked Questions

Multiply by (1 + inflation rate)^years to get the future cost of something priced today. Divide by the same factor to get what a sum of money will be worth in today's purchasing power. The two are reciprocals and both are shown here.
India's long-run CPI average sits near 6%, and the RBI targets 4% with a tolerance band of two points either side. For a personal plan, 6% is a reasonable default and 7% to 8% is the prudent stress test, particularly if your spending is weighted toward education or healthcare.
What money can actually buy, as opposed to its face value. ₹1,00,000 held for five years at 6% inflation still says ₹1,00,000 on the statement but buys what ₹74,726 buys today. That ₹25,274 is a real loss, even though no transaction happened.
The return after inflation. It is not the simple difference between the two: they compound against each other, so (1 + nominal) = (1 + real) × (1 + inflation). A 12% return against 6% inflation is a 5.66% real return, not 6%.
Divide 72 by the inflation rate to estimate the years for prices to double. At 6% it gives 12 years, against an exact 11.9. This page shows both so the size of the approximation is visible.
Often, after tax. A 7% FD taxed at a 30% slab rate yields 4.9% net. Against 6% inflation that is a real loss of about 1% a year, even though the balance is rising. This is the main argument for holding long-term savings in something other than deposits.
By the inflation rate, compounded. At 6%, a salary needs to roughly double every twelve years just to stand still. An annual increment below the inflation rate is a pay cut in real terms, however it is presented.
It is the single most important input. Pegging a retirement corpus to today's spending without inflating it understates the requirement enormously — over thirty years at 6%, spending multiplies by nearly six. The retirement calculator applies it for you.
No. The rate slider starts at 1%, because sustained deflation has not been an Indian phenomenon and a negative rate would invert the page's framing. For a one-off price fall, the same formula works with a negative rate.
Because it is the same arithmetic. Prices compound exactly as returns do. The difference is only in what it means: compounding works for you on an investment and against you on a cost.