Inflation Calculator
See how inflation erodes purchasing power over time. Calculate the future cost of goods, find what past prices equal today, or determine the average inflation rate between two amounts.
Inflation & Purchasing Power Calculator
📊 Inflation Results
💡 Summary
📋 Year-by-Year Breakdown
| Year | Cost / Value | Purchasing Power of ₹1 | Cumulative Inflation |
|---|
Understanding Inflation
Inflation is the general increase in prices over time, resulting in a decline in the purchasing power of money. If inflation averages 3% per year, something that costs ₹100 today will cost ₹103 next year, and about ₹134.39 in 10 years.
- Consumer Price Index (CPI): The Bureau of Labor Statistics measures inflation by tracking a basket of goods and services (food, housing, transportation, medical care, etc.). The annual % change in CPI is the headline inflation rate.
- Core Inflation: Excludes volatile food and energy prices for a smoother trend. The Fed targets 2% core PCE inflation.
- Real vs. Nominal: Nominal values are in current dollars; real (inflation-adjusted) values remove the effect of inflation to compare purchasing power across time.
- Rule of 72: Divide 72 by the inflation rate to estimate how many years it takes for prices to double. At 3%, prices double in ~24 years.
Inflation Formula
To find the inflation rate between two values:
Inflation Calculator FAQ
What inflation rate should I use?
+Inflation varies over time. For long-term planning, many users test scenarios such as 4%, 6%, and 8% and stress-test affordability across all three instead of relying on a single estimate.
How does inflation affect savings?
+If your savings earn less than the inflation rate, you’re losing purchasing power. For example, a savings account paying 1% while inflation is 3% means your money loses about 2% of its real value each year. This is why investing (stocks, bonds, real estate) is important for long-term wealth preservation.
What causes inflation?
+Main causes include: (1) Demand-pull: too much money chasing too few goods, (2) Cost-push: rising production costs passed to consumers, (3) Monetary expansion: when the money supply grows faster than economic output, and (4) Supply chain disruptions, as seen during 2021–2022. Central banks use interest rates to manage inflation.
What is the Rule of 72?
+Divide 72 by the annual inflation rate to estimate how many years it takes for prices to double. At 3% inflation: 72 ÷ 3 = 24 years. At 6%: 72 ÷ 6 = 12 years. It’s a quick mental shortcut based on the compound growth formula.
Is deflation the opposite of inflation?
+Yes. Deflation is a sustained decrease in the general price level — money gains purchasing power. While it sounds positive, deflation is usually harmful: consumers delay purchases waiting for lower prices, businesses see falling revenue, and debt burdens increase in real terms. Japan experienced deflation for much of the 1990s–2010s.