Inflation Calculator
See what today's amount will cost in the future, and how much of its purchasing power it loses, at any assumed inflation rate.
What this calculator does
Inflation is the rate at which prices rise over time, which means the same amount of money buys less in the future than it does today. This calculator projects two related numbers from an amount, a rate and a time period: what that amount will cost to replace in the future, and what today's amount will feel like in future purchasing-power terms.
The formula
Future cost = amount × (1 + rate)ⁿ, where rate is the annual inflation rate as a decimal and n is the number of years. This is the same compounding formula used for compound interest, just applied to prices instead of savings — because inflation compounds year over year the same way investment returns do.
Worked example
₹1,00,000 today, at 6% assumed annual inflation, over 10 years: future cost = 1,00,000 × (1.06)¹⁰ ≈ ₹1,79,085. That means something that costs ₹1,00,000 today would cost roughly ₹1,79,000 in 10 years at that inflation rate — and conversely, ₹1,00,000 held for 10 years would only buy what about ₹55,839 buys today.
Why this matters for planning
This is the same principle that shows why a fixed pension or a savings goal set in today's rupees needs to be adjusted upward for future decades — inflation is often ignored in long-term financial planning, leading to underestimating what will actually be needed. It's also why long-term investment return calculators (like SIP and Compound Interest) are sometimes shown in "real" (inflation-adjusted) terms rather than just nominal growth.
Limitations
This calculator uses a single, constant assumed rate for the whole period — real-world inflation varies year to year and by category of spending (education and healthcare often inflate faster than the general rate, for instance). Treat the result as a planning estimate, not a guaranteed figure; nobody can predict future inflation with certainty.
Frequently asked questions
There's no single right answer — many people use a long-run historical average for their country as a starting assumption, but you should adjust it based on the specific goal you're planning for, since not all categories of spending inflate at the same rate.
"Future cost" tells you what today's amount will cost to replace later. "Today's amount will feel like" tells you the reverse — what that same fixed amount, held unchanged, will actually be worth in purchasing power once it arrives in the future.
The math is identical (compounding), but the direction is opposite — compound interest grows your money's nominal value, while inflation erodes your money's real purchasing power. Comparing the two tells you your true, inflation-adjusted return.
Yes, informally — it can help estimate what an equivalent salary might need to be in the future to maintain the same purchasing power, though actual salary growth depends on many other factors.