📉 Inflation Calculator
See how inflation changes the value of money over time — future cost or past value.
Frequently Asked Questions
How do I use the Inflation Calculator?
Choose "Future Cost" to see what today's amount will cost in the future, or "Past Value" to see what today's amount was worth N years ago. Enter the Current Amount, the Inflation Rate, and the Number of Years, then click Calculate to see the equivalent value, the change in value, and a year-by-year chart and table.
How is the future cost of an item calculated?
Future Cost = Current Amount × (1 + inflation rate)^number of years. For example, ₹1,00,000 worth of expenses today, at 6% inflation, will cost roughly ₹3,20,700 in 20 years. This compounding effect is why retirement and long-term goal planning must account for inflation, not just nominal amounts.
What does "Past Value" mean?
Past Value answers: "An amount today is equivalent to how much purchasing power N years ago?" It's calculated as Current Amount ÷ (1 + inflation rate)^years. For example, ₹1,00,000 today had the same purchasing power as roughly ₹55,800 had 10 years ago at 6% average inflation — meaning prices roughly doubled.
What inflation rate should I use for planning?
India's headline retail inflation (CPI) has averaged roughly 5–7% over the last decade, though it fluctuates year to year. For long-term goals like retirement or education planning, many financial planners use 6% as a conservative default — but costs like healthcare and education often rise faster than headline inflation, so consider a higher rate for those specific goals.
Why does inflation matter for retirement planning?
If you plan for retirement using today's expenses without adjusting for inflation, you'll significantly underestimate how much corpus you actually need — because your monthly expenses will be much higher by the time you retire, and will keep rising throughout your retirement years too. Use this calculator to estimate your future monthly expenses, then feed that into our Retirement Corpus Calculator.
Is this the same as compound interest?
Mathematically, the formula is identical to compound interest — both compound a rate over time. The difference is interpretation: compound interest grows the value of your money (a good thing), while inflation grows the cost of goods and erodes the purchasing power of a fixed amount of money (something to plan around). See our Compound Interest Calculator for the growth-focused version.
Does this calculator assume a single constant inflation rate for the whole period?
Yes. Both the Future Cost and Past Value calculations apply the same annual rate compounded for every year of the period — they don't model year-to-year fluctuations in actual inflation. If you want to be more conservative, run the calculation twice with a lower and a higher rate (e.g. 5% and 8%) to see a realistic range rather than relying on a single number.
Why is the Past Value smaller than the Current Amount even though prices have risen?
Past Value tells you how much money N years ago had the same purchasing power as your current amount — and since prices have generally risen, a smaller sum of money back then could buy the same goods. For example, ₹1,00,000 of purchasing power today was equivalent to only about ₹55,800 ten years ago at 6% inflation, because ₹55,800 then could buy what ₹1,00,000 buys now.