About this Inflation Calculator
Inflation is the rise in prices over time. An inflation calculator shows how much a current expense may cost in the future and how much purchasing power cash loses if it earns nothing.
Investors use this before setting SIP targets for education, retirement or home goals so the corpus matches tomorrow’s prices, not today’s.
How to use this calculator
- Enter today’s cost or cash amount.
- Choose an assumed annual inflation rate.
- Select the number of years ahead.
- Compare future cost with eroded buying power of idle cash.
Formula used
Future cost = P × (1 + i)^t. Purchasing power of P after t years = P / (1 + i)^t, where i is inflation as a decimal.
Practical tips
- Use a slightly higher inflation assumption for education and healthcare goals.
- Aim for investment returns that beat inflation after tax and fees.
- Revisit goal amounts every few years as real prices change.
Frequently asked questions
Why use an inflation calculator?
It converts today’s prices into realistic future targets so your savings plan does not fall short.
What inflation rate should I assume?
Many long-term India-focused plans use roughly 5–7% as a starting point, but personal baskets differ. Stress-test higher rates for critical goals.
Does inflation affect SIP planning?
Yes. Your target corpus should reflect inflated future costs. Pair this tool with the SIP or retirement calculator.
Is cash safe from inflation?
Cash preserves nominal value but usually loses purchasing power when prices rise. That is why long-term money is often invested.
