Inflation Calculator
The Inflation Calculator shows how inflation erodes purchasing power over time. At 6% inflation, ₹1 lakh today will be worth only ₹55,840 in 10 years.
Calculation Formula
- P = Principal amount
- r = Annual interest rate (decimal)
- n = Number of years
- t = Compounding frequency per year
How to Use This Calculator
Enter the current amount, interest rate, and time period. The maturity value updates automatically. The chart shows the breakdown between your invested principal and the interest earned.
This calculator is for informational purposes only. Investment returns are illustrative and based on assumed rates that may vary. Market-linked investments carry risk and past performance does not guarantee future returns. Interest rates on small savings schemes are reviewed quarterly by the Government of India. Consult a SEBI-registered financial advisor before making investment decisions.
Frequently Asked Questions
Find answers to common questions about inflation calculator. Click on any question to expand the answer.
An inflation calculator helps you understand the impact of inflation on your money over time. It shows you the future value of a certain amount of money, or conversely, how much money you would need in the future to have the same purchasing power as today.
Inflation erodes the purchasing power of your money. If your savings are not growing at a rate higher than the inflation rate, you are effectively losing money in real terms. This calculator helps you visualize that erosion.
India's long-term average inflation rate (CPI) has been around 5-6%. For financial planning, it is prudent to use a slightly conservative estimate, such as 6%, to ensure your goals are adequately funded.
The calculator uses the formula: Future Value = Present Value * (1 + Inflation Rate) ^ Number of Years. This shows how the value of money changes due to the compounding effect of inflation.
Ignoring inflation is one of the biggest financial planning mistakes. A goal that costs ₹10 Lakhs today might cost over ₹32 Lakhs in 20 years at 6% inflation. Factoring in inflation ensures your financial goals are realistic and achievable.
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