Inflation
Inflation Calculator
See how a constant inflation rate lifts future costs and reduces the purchasing power of a fixed amount of money.
What inflation does
Inflation is a rise in the general level of prices. A rupee that buys a basket of goods today will usually buy a smaller basket later if prices keep rising. That is why a retirement number that looks large in today’s rupees can be tight in future rupees.
The calculator applies one rate every year. Real inflation jumps around — food, rent and fuel do not move together — so treat the result as a teaching estimate.
Inflation formulas
Future cost = P × (1 + i)^t · Purchasing power = P / (1 + i)^t
P is today’s amount, i is the annual inflation rate, and t is the number of years. Future cost is what you would need later to match today’s purchasing power. Purchasing power is what today’s amount would feel like after t years of inflation.
Example
₹10,00,000 at 6% inflation for 10 years has a future required amount of about ₹17,90,848 to keep the same purchasing power. Left unchanged, that ₹10,00,000 would feel like about ₹5,58,395 in today’s terms.
Important considerations
Personal inflation can be higher than headline CPI if your spending is tilted to healthcare or education. Taxes and fees are separate. Pair this page with the retirement calculator when you are sizing a long-term corpus.
Frequently asked questions
Is this India’s official CPI?
No. You choose the inflation rate. Official indices change by month, basket and geography. Use a rate that matches the costs you care about, such as education or general household spending.
What is the difference between future required amount and purchasing power?
Future required amount is how much you would need later to buy what today’s amount buys now. Purchasing power equivalent is how much today’s amount would feel like after years of inflation.
Should investment returns beat this rate?
Over long periods, many people aim for returns above inflation after tax and costs. That is a planning goal, not something this calculator can guarantee.
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SmartCalculators provides educational calculators and estimates. Results are for informational purposes only and should not be considered financial, tax, investment, legal or professional advice.