Inflation calculator: future cost and buying power
Inflation raises prices over time, so the same money buys less. This calculator shows both sides: what costs may rise to and what your money may be worth.
How to use this calculator
- Enter an amount in today's money.
- Enter the number of years ahead.
- Enter the yearly inflation you assume.
- Read the future cost, the buying power and the table.
Worked examples
Example 1
A ₹1,00,000 cost today, over 20 years at 6%.
You enter
| Amount today | ₹1,00,000 |
|---|---|
| Years ahead | 20 |
| Inflation (per year) | 6% |
You get
| What costs ₹1,00,000 today may cost | ₹3,20,714 |
|---|---|
| Buying power of ₹1,00,000 then | ₹31,180 in today's money |
| Prices rise by | 220.7% |
Example 2
The same amount if inflation runs higher, at 8%.
You enter
| Amount today | ₹1,00,000 |
|---|---|
| Years ahead | 20 |
| Inflation (per year) | 8% |
You get
| What costs ₹1,00,000 today may cost | ₹4,66,096 |
|---|---|
| Buying power of ₹1,00,000 then | ₹21,455 in today's money |
| Prices rise by | 366.1% |
How it works
At 6% a year prices roughly double in 12 years. A fixed sum of money loses buying power every year unless it earns more than inflation.
Your own inflation may differ from the headline: education and healthcare have often risen faster than average prices.
Formula
Future cost = amount x (1 + inflation)^years. Buying power of a fixed amount = amount / (1 + inflation)^years.
Common questions
Which inflation rate should I use?
Try a low and a high figure.
Does an FD beat inflation?
Only if its after-tax rate is above inflation.
Is it the same everywhere?
No, it varies by country and household.
Learn more
Read the lesson Money, inflation and interest on pusaram.com for the ideas behind this calculator.
Calculators give estimates for learning and planning. They are not financial, tax, legal or medical advice, and results depend entirely on the numbers you enter. Check rates, limits and rules with an official source or a qualified professional before acting.