Inflation Calculator – Find the Real Value of Money Over Time
This free inflation calculator shows how inflation erodes purchasing power over time. Enter an amount, a start year, an end year and an annual inflation rate to instantly see what your money is worth — or what it was worth — in different years. No signup required.
What is Inflation?
Inflation is the rate at which the general level of prices for goods and services rises over time, causing the purchasing power of money to fall. If inflation is 6% per year, something that costs ₹100 today will cost ₹106 next year. Over decades, even moderate inflation dramatically reduces what your money can buy — making inflation planning essential for savings, retirement and investment.
Inflation Formula
Future Value = Present Value × (1 + Inflation Rate ÷ 100)^Years
Present Value = Future Value ÷ (1 + Inflation Rate ÷ 100)^Years
India Inflation Rate History
| Period | Average CPI Inflation | Impact on ₹100 |
|---|
| 2000–2010 | ~6.5% p.a. | ₹100 in 2000 ≈ ₹188 in 2010 |
| 2010–2020 | ~6.0% p.a. | ₹100 in 2010 ≈ ₹179 in 2020 |
| 2020–2025 | ~5.5% p.a. | ₹100 in 2020 ≈ ₹131 in 2025 |
How Inflation Affects Your Life
- Savings — money sitting idle in a low-interest account loses real value every year if returns are below inflation
- Retirement planning — ₹50,000/month today may only buy ₹20,000 worth of goods in 20 years at 5% inflation
- Salary hikes — a 5% salary raise when inflation is 6% means your real purchasing power actually fell
- Fixed deposits — if an FD earns 6.5% but inflation is 6%, your real return is only 0.5%
- Loans — inflation benefits borrowers — you repay with money that is worth less than when you borrowed
💡 To beat inflation, invest in assets that historically outpace it — equity mutual funds, index funds, real estate and gold. Keeping large amounts in savings accounts or cash loses real value over time.
Frequently Asked Questions
What inflation rate should I use for planning?India's CPI inflation has averaged 5–6% over the past decade. For conservative financial planning, use 6–7%. For specific categories like education or healthcare, use 8–10% as these tend to inflate faster.
What is CPI vs WPI?CPI (Consumer Price Index) measures retail prices of goods and services consumed by households — it reflects everyday inflation. WPI (Wholesale Price Index) measures prices at the producer/wholesale level. RBI primarily targets CPI inflation.
How does the RBI control inflation?The RBI controls inflation primarily by adjusting the repo rate (the rate at which it lends to banks). Raising rates makes borrowing costlier, reducing spending and cooling inflation. Lowering rates stimulates the economy but may increase inflation.
What is stagflation?Stagflation is a rare economic condition of high inflation combined with slow economic growth and high unemployment — a particularly difficult situation for policymakers because measures to control one often worsen the others.