Inflation Calculator

Calculate how inflation erodes purchasing power over time — past, present, and future.

Inflation Impact Calculator

1%India CPI avg ~6%20%
1 yr40 yrs
To buy the same goods that cost ₹1,00,000 today,
you'll need ₹1,79,085 in 10 years.

Future Equivalent Amount

₹1,79,085

needed in 10 years to match today's ₹1,00,000

Purchasing Power Lost

₹79,085

Value Erosion

44.2%

Rule of 72 — Prices Double In

12 years

at 6% inflation

Inflation Calculator Formula & How It Works

Future Value = Present Value × (1 + r)ⁿ | Real Value = Nominal / (1 + cumulative inflation)
  • r = annual inflation rate (e.g. 0.06 for 6%)
  • n = number of years
  • CPI: Consumer Price Index tracks average price changes
  • Real value: adjusted for inflation; Nominal value: not adjusted

Inflation is the rate at which the general price level rises, eroding purchasing power. ₹100 at 6% inflation is worth only ₹55.84 in 10 years in today's terms. India's average CPI inflation (2010–2024) is approximately 6%. The Rule of 72: divide 72 by the inflation rate to find how many years until prices double (72/6 = 12 years).

Inflation Calculator FAQs

What is inflation and why does it happen?

Inflation is the rate at which prices for goods and services rise over time. Caused by: demand-pull (too much money chasing goods), cost-push (rising production costs), or monetary expansion (more money printed). Measured by the Consumer Price Index (CPI).

How does inflation affect savings?

If your savings account earns 4% but inflation is 6%, your real return is −2% — your money is losing purchasing power. To protect savings, earn returns above inflation through investments in equities, real estate, gold, or inflation-indexed bonds.

What is real vs nominal interest rate?

Nominal rate is the stated rate. Real rate = Nominal − Inflation (Fisher equation). If your FD earns 7% and inflation is 6%, real return ≈ 1%. Real rates show the true growth in purchasing power.

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