Inflation Calculator
Constant-rate scenario, not historical CPI data or a forecast. Investment return is an effective annual assumption before tax and fees.
Year-by-year outlook
| Year | Future cost | Cash buying power | Real investment |
|---|---|---|---|
| 0 | ₹1,00,000 | ₹1,00,000 | ₹1,00,000 |
| 1 | ₹1,06,000 | ₹94,340 | ₹1,01,887 |
| 2 | ₹1,12,360 | ₹89,000 | ₹1,03,809 |
| 3 | ₹1,19,102 | ₹83,962 | ₹1,05,768 |
| 4 | ₹1,26,248 | ₹79,209 | ₹1,07,763 |
| 5 | ₹1,33,823 | ₹74,726 | ₹1,09,797 |
| 6 | ₹1,41,852 | ₹70,496 | ₹1,11,868 |
| 7 | ₹1,50,363 | ₹66,506 | ₹1,13,979 |
| 8 | ₹1,59,385 | ₹62,741 | ₹1,16,130 |
| 9 | ₹1,68,948 | ₹59,190 | ₹1,18,321 |
| 10 | ₹1,79,085 | ₹55,839 | ₹1,20,553 |
Cash buying power assumes no interest. The separate investment scenario assumes your entered return, with no further contributions.
Future price and future purchasing power are not the same number
Inflation changes what a given amount of money can buy. Future-cost mode estimates the later price of a purchase at a constant inflation assumption. Purchasing-power mode asks what unchanged cash will be worth in today's money after that same period. The investment comparison separately models money earning your assumed annual return.
Worked example
At 6% annual inflation, a Rs 1,00,000 purchase costs approximately Rs 1,79,085 after ten years. Meanwhile, Rs 1,00,000 held without interest buys roughly what Rs 55,839 buys today. The price increase is about 79.08%, while purchasing-power loss is about 44.16%; these percentages are not interchangeable.
Formula and calculation method
Future cost = cost today x (1 + inflation)^years; purchasing power = unchanged cash / (1 + inflation)^yearsAnnual inflation compounds over the entered duration, including fractional years. A negative inflation input models deflation. Future cost and purchasing power are reciprocal adjustments: they must not be calculated by adding or subtracting a simple percentage each year. The schedule includes year zero, each completed year and the final fractional year where applicable.
Interpretation and limitations
Real annual investment return equals (1 + nominal return) / (1 + inflation) - 1. With 8% return and 6% inflation, this is approximately 1.8868%, not exactly 2%. The investment scenario assumes a one-time initial amount, no additions and no taxes or fees. These are constant-rate illustrations, not historical CPI calculations, current inflation readings or forecasts.
Reference: Investor.gov: purchasing power.
Common questions
Is the default inflation rate the latest Indian CPI figure?
No. It is a manually editable scenario assumption. This page does not fetch CPI or claim to measure the current rate of inflation in India.
Can I model deflation?
Yes. A negative annual inflation assumption lowers projected future prices and increases the purchasing power of unchanged cash. It does not imply deflation will occur.
Does headline inflation match my household costs?
Not necessarily. Your spending mix, location and categories such as education, housing or healthcare may change differently. Use an assumption relevant to the cost being explored.