Inflation Impact and Purchasing Power Calculator
Inflation Impact Calculator
See how rising prices reduce the real value of your money — and plan ahead.
View Year-by-Year Breakdown
| Year | Future Cost of Same Goods | Real Value of Today’s ₹ | Purchasing Power Loss (%) |
|---|
How This Calculator Works
Future cost is calculated as FV = PV × (1 + i)n. The real value (purchasing power) of today’s money in n years is PV ÷ (1 + i)n. Rate is treated as constant, compounded annually.
Disclaimer: Actual inflation varies year to year and across categories (food, fuel, healthcare, education). Treat results as a planning estimate, not a forecast.
Frequently Asked Questions
What inflation rate should I use for India?
India’s CPI inflation has averaged about 5.6% since 2012 but swings widely: 4.6% in 2024–25, about 1.7% in April–December 2025–26, and 5.54% in September 2026. The RBI targets 4% with a 2–6% tolerance band, renewed to March 2031. Many planners test 4%, 6% and 8%, and use a higher rate for costs that rise faster than CPI, such as education or healthcare.
What is purchasing power and how does it decrease?
Purchasing power is how much a unit of currency can buy. As prices rise, each rupee buys fewer goods. At 6% inflation, purchasing power roughly halves in about 12 years (the exact figure is 11.9 years).
Does this calculator account for income growth?
No. It shows inflation’s effect on a fixed sum. Whether your savings keep up depends on your return after inflation, called the real return.
Is inflation always constant?
No. Yearly inflation changes. This tool applies one constant rate for planning, so try several rates (for example 4%, 6% and 8%) to see the range.
Why can education and healthcare costs rise faster than general inflation?
General CPI is a basket of many goods. Costs that depend on limited supply, rising quality standards or growing demand can rise faster than the average. Use your own estimate for such costs and test a higher rate in the calculator.
What is the real return on my savings?
Real return is the return after inflation: (1 + return) ÷ (1 + inflation) − 1. A 7% return with 6% inflation gives about 0.94%, not 1%. Money that earns less than inflation loses purchasing power. This page is information, not investment advice.
How inflation reduces what your money can buy
Inflation is the rise in the general level of prices. If prices grow by a rate i every year, goods that cost PV today cost PV × (1 + i)n after n years, and the amount of goods one rupee buys falls to 1 ÷ (1 + i)n. The calculator above applies one constant rate, compounded yearly.
Future cost and purchasing power at 4%, 6% and 8% inflation
| Inflation | Period | Cost then of goods that cost ₹1,00,000 today | What ₹1,00,000 buys then (in today’s rupees) |
|---|---|---|---|
| 4% | 10 years | ₹1,48,024 | ₹67,556 |
| 4% | 20 years | ₹2,19,112 | ₹45,639 |
| 4% | 30 years | ₹3,24,340 | ₹30,832 |
| 6% | 10 years | ₹1,79,085 | ₹55,839 |
| 6% | 20 years | ₹3,20,714 | ₹31,180 |
| 6% | 30 years | ₹5,74,349 | ₹17,411 |
| 8% | 10 years | ₹2,15,892 | ₹46,319 |
| 8% | 20 years | ₹4,66,096 | ₹21,455 |
| 8% | 30 years | ₹10,06,266 | ₹9,938 |
Example: at 6% inflation, goods worth ₹1,00,000 today cost about ₹3,20,714 after 20 years, and ₹1,00,000 of savings kept as cash would buy only about ₹31,180 worth of today’s goods. For ₹1 crore, multiply every figure by 100.
How long until purchasing power halves
| Inflation rate | Exact time to halve | Rule of 72 estimate |
|---|---|---|
| 3% | 23.4 years | 24.0 years |
| 4% | 17.7 years | 18.0 years |
| 5% | 14.2 years | 14.4 years |
| 6% | 11.9 years | 12.0 years |
| 8% | 9.0 years | 9.0 years |
| 10% | 7.3 years | 7.2 years |
The rule of 72 divides 72 by the inflation rate to estimate how many years it takes for prices to double, or for money to lose half its purchasing power. It is a quick check, and the calculator above gives the exact figure.
Real return: are your savings keeping up?
Compare what your savings earn with inflation. The real return is (1 + return) ÷ (1 + inflation) − 1. A 7% return with 6% inflation is about 0.94% in real terms, and a 5% return with 6% inflation is about −0.94%, a loss of purchasing power even though the balance grows. Taxes and charges lower the real return further. This is arithmetic, not advice on where to invest.
Which inflation rate should you use?
- Use the RBI’s 4% target as a low case and 6%, the top of its tolerance band, as a cautious case.
- India’s CPI inflation has averaged about 5.6% since 2012, with large swings: 4.6% in 2024–25 and 5.54% in September 2026.
- For costs that rise faster than general prices, such as education or healthcare, test a higher rate such as 8% or more and use your own estimate.
- Run several rates, because a constant rate is a planning assumption, not a forecast.
Sources: RBI Bulletin on the inflation target; Reuters, India September 2026 inflation; Economic Survey, inflation chapter; Trading Economics, India CPI history. Figures as read in November 2026.
More planning tools: the loan tenure calculator, the stock average calculator and the full tools list. This page is for education and is not investment advice.
Investing to stay ahead of inflation? Compare brokers by how you invest with the demat account finder, or work out your average buy price with the stock average calculator.
