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Inflation calculator
Prices rise quietly. See what something that costs a given amount today is likely to cost in future, and what your money will buy.
The formula
Future cost = Cost today × (1 + inflation)^years
At 6% a year, ₹1,00,000 of expenses becomes about ₹2,39,656 in 15 years. Seen the other way, ₹1,00,000 kept idle for 15 years buys only what about ₹41,727 buys today.
Choosing an inflation rate
The Reserve Bank of India targets consumer inflation of 4% with a band of two percentage points either side. Your own inflation can run higher than the headline figure, because education and healthcare costs have tended to rise faster than the average basket. Using 6% for general expenses and 8% to 10% for education and medical goals is a common planning convention.
Why it matters for investing
The return that counts is the real return: what you earn above inflation, after tax. A deposit paying 7% that leaves 5% after tax loses ground when prices rise 6%. Long-term goals therefore need some assets with a reasonable chance of beating inflation. Feed the inflated figure into the goal SIP or retirement calculator.
Questions
What is the rule of 72?
Divide 72 by the inflation rate to estimate how many years prices take to double. At 6%, that is about 12 years.