Inflation Calculator

Inflation is the rate at which prices rise over time, which means the same rupee amount buys progressively less each year. This calculator lets you look at that effect from either direction: Future Value tells you how much you'd need in the future to buy what a sum of money buys today. Past Value works backward — it tells you what a rupee amount today was equivalent to some years ago, or what you'd have needed years ago to have the same purchasing power as an amount today. Both directions apply a single constant assumed rate rather than actual historical year-by-year prices, so treat the result as a planning estimate, not a historical record.

The math is straightforward compounding, just like interest, except it works in the opposite direction for your money's real value. For Future Value, the calculator multiplies your amount by (1 + inflation rate)^years. For Past Value, it divides your amount by that same factor. A higher inflation rate or a longer time period both magnify the effect, since compounding means small yearly increases add up to a large cumulative difference.

Worked example (Future Value): Suppose you have 100,000 (in your local currency) today and expect average inflation of 6% per year. At 6% annual inflation, 100,000 today would require approximately 100,000 × (1.06)^10 ≈ 179,085 after 10 years to maintain the same purchasing power. Equivalently, 100,000 received 10 years from now would only have the purchasing power of about 55,839 in today's money. The same math applies in ₹, $, £, €, or any other currency — pick your currency and enter your own amount in the calculator above for a localised result.

Worked example (Past Value): Suppose something costs 100,000 (in your local currency) today, and inflation has averaged 6% per year over the last 10 years. Working backward, 100,000 ÷ (1.06)^10 ≈ 55,839 — meaning the same item would have cost roughly 55,839 ten years ago, in that same currency.

Keep in mind that inflation isn't perfectly uniform — the rate varies year to year and differs across categories like food, fuel, healthcare, and education. This calculator uses a single assumed average rate applied consistently across the whole period, which is a reasonable planning approximation but won't exactly match any specific real-world price history. For long-term financial planning — retirement corpus targets, education costs, or comparing salary growth to inflation — this kind of average-rate projection is a commonly used simple planning model, although actual inflation can vary significantly over time.

1. Using one flat rate for every goal. As covered above, education and healthcare inflation typically outpace general CPI significantly — using 6% across the board understates those specific targets.

2. Planning retirement around today's expenses. The single most common retirement-planning error — always inflate your current monthly expenses forward to your retirement date before sizing your corpus.

3. Forgetting inflation eats into investment returns too. A 7% FD return sounds fine until you subtract 6% inflation, leaving only around 0.94% real growth (exactly: (1.07/1.06) − 1) — always think in terms of real (inflation-adjusted) returns, not just nominal ones, when comparing investment options.

4. Assuming inflation will stay exactly at its historical average. Actual year-to-year inflation is volatile — treat any long projection as a planning estimate with a margin of safety, not a precise forecast, and revisit your numbers periodically as actual inflation data comes in.

5. Ignoring inflation when comparing salary growth. A 5% annual raise barely keeps pace with 5-6% inflation — meaning your real purchasing power may be flat or even shrinking despite a nominal pay increase; compare your raise percentage against inflation, not just against zero.