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Inflation calculator
What things will cost later, and what your money will be worth.
Quick answer
Inflation raises prices over time, so the same money buys less and the same goods cost more. Formula: Future cost = amount × (1 + inflation)^years. Something that costs ₹1,00,000 today costs about ₹1,79,085 in 10 years at 6% inflation.
Read the guide: How to calculate CAGR, with examples
Same things will cost
₹1,79,085
- Your money will buy only
- ₹55,839
- Purchasing power lost
- 44.2%
- Cost
Year-by-year table
| Year | Cost of the same things |
|---|---|
| 1 | ₹1,06,000 |
| 2 | ₹1,12,360 |
| 3 | ₹1,19,102 |
| 4 | ₹1,26,248 |
| 5 | ₹1,33,823 |
| 6 | ₹1,41,852 |
| 7 | ₹1,50,363 |
| 8 | ₹1,59,385 |
| 9 | ₹1,68,948 |
| 10 | ₹1,79,085 |
How is the effect of inflation calculated?
Inflation is the yearly rise in prices. A steady 6% means prices double in about 12 years.
Money left idle loses purchasing power, which is why savings need to earn more than inflation to keep their value.
Use the future cost to plan for school fees, a wedding or retirement.
What is the formula for the effect of inflation?
- Future cost = amount × (1 + inflation)^years
- Purchasing power of today’s money = amount ÷ (1 + inflation)^years
Can you show a worked example of the effect of inflation?
₹1,00,000 at 6% inflation for 10 years: 1,00,000 × 1.06^10 = ₹1,79,085. In that time ₹1,00,000 in cash buys only about ₹55,839 worth of today’s goods.
What will ₹1 lakh of goods cost after inflation?
The future cost of something that costs ₹1,00,000 today.
| Inflation | 5 years | 10 years | 20 years |
|---|---|---|---|
| 4% a year | ₹1,21,665 | ₹1,48,024 | ₹2,19,112 |
| 5% a year | ₹1,27,628 | ₹1,62,889 | ₹2,65,330 |
| 6% a year | ₹1,33,823 | ₹1,79,085 | ₹3,20,714 |
| 7% a year | ₹1,40,255 | ₹1,96,715 | ₹3,86,968 |
| 8% a year | ₹1,46,933 | ₹2,15,892 | ₹4,66,096 |
Common questions
What inflation rate should I use?
Long-run average consumer inflation in India has often been in the 4 to 7% range. Use a figure that matches your own costs, such as education or healthcare, which can rise faster.
Does it work backwards?
Yes in spirit: a price today of ₹1,79,085 equals ₹1,00,000 ten years ago at 6% a year.
What is real return?
Your return minus inflation, roughly. A 9% return with 6% inflation grows your buying power by about 3% a year.
Is inflation the same for everything?
No. Food, fuel, education and housing each move at their own pace. Use a rate that fits the thing you are planning for.