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How inflation reduces your money, with numbers

Updated 2026-11-13

Quick answer

At 6% inflation, something that costs ₹1,00,000 today costs ₹1,79,085 in 10 years, and ₹1,00,000 in cash buys only about ₹55,839 worth of today’s goods, a loss of 44% of its purchasing power.

Steps

  1. Enter the amount you have or the price today. Here it is ₹1,00,000.
  2. Enter a yearly inflation rate and the number of years: 6% and 10.
  3. The future cost is the amount × (1 + inflation)^years = 1,00,000 × 1.06^10 = ₹1,79,085.
  4. The buying power of today’s money is the amount ÷ (1 + inflation)^years = ₹55,839.
  5. Compare with the return on your savings to see whether they stay ahead of prices.

Small differences in the rate add up

Over 10 years, ₹1,00,000 of goods costs ₹1,62,889 at 5% inflation, ₹1,79,085 at 6% and ₹1,96,715 at 7%. In the same years your ₹1,00,000 of cash buys ₹61,391, ₹55,839 and ₹50,835 worth of today’s goods.

At 7% your money loses about half its buying power in 10 years. Because the effect compounds, a seemingly small rate is a large change over a long time.

Longer horizons

Over 20 years at 6%, what costs ₹1,00,000 today costs ₹3,20,714, and ₹1,00,000 in cash buys only ₹31,180 worth of today’s goods. That is why long-term plans, such as retirement, must use inflation-adjusted figures, and why money that earns less than inflation is slowly losing value.

What to do with the number

Use it to set goals in future money: a goal that costs ₹10,00,000 today needs more by the time you reach it. Compare the interest on a deposit with the inflation rate to see your real return. The calculator uses one steady rate; actual inflation changes from year to year and differs between goods, such as education, health and food.

Try it yourself

Common questions

What is inflation?

A general rise in prices over time, so the same money buys less.

What inflation rate should I use?

Try a range, such as 5%, 6% and 7%. Costs such as education and healthcare often rise faster than the general rate.

Does inflation affect savings in the bank?

Yes. If the interest is lower than inflation, your money buys less each year even though the balance grows.

How do I plan for it?

State future goals in future prices and choose investments you expect to beat inflation over the long term, accepting the risk that comes with that.

Also read: How to plan your retirement corpus step by step, How to calculate CAGR, with examples