Inflation Calculator — How Purchasing Power Erodes Over Time

Inflation is the silent wealth killer. ₹1 lakh today won’t buy what ₹1 lakh buys in 10 years. Understanding this is critical for any financial plan.

The inflation formula

Future Value = Present Value × (1 + Inflation Rate)^Years
Present Value = Future Value ÷ (1 + Inflation Rate)^Years

Example: ₹10 lakh at 6% inflation for 20 years:

₹10,00,000 × (1.06)^20 = ₹32,07,135

You’ll need ₹32 lakh in 20 years to have the same buying power as ₹10 lakh today.

Historical inflation rates

Country	Average (2014–2024)
India	5.5–6.5%
US	2.5–3.5%
UK	2.5–4.0%
EU	1.5–3.0%

What inflation means for your savings

A savings account earning 3.5% while inflation is 6% means you’re losing 2.5% real value per year. After 10 years:

• Nominal growth: ₹1 lakh → ₹1.41 lakh
• Real value: Only ₹79,000 in today’s purchasing power

How to beat inflation

1. Equity investments — Historically return 12–15% in India (long-term)
2. Real estate — Appreciates 8–10% annually in growing cities
3. Gold — 8–10% long-term, good inflation hedge
4. Inflation-indexed bonds — Returns linked to CPI
5. Avoid cash hoarding — Worst inflation strategy

Use our Inflation Calculator to see how any amount changes in value across different time periods and inflation rates.