Inflation Calculator - Calculate Future Value of Money
Free online inflation calculator to calculate how inflation affects your money's purchasing power over time. Plan your investments and savings effectively.
About Inflation Calculator
Our Inflation Calculator is a powerful financial tool designed to help you understand how inflation erodes the purchasing power of your money over time. Inflation is the gradual increase in prices and the corresponding decrease in the purchasing power of money.
This advanced calculator provides accurate calculations showing what your money will be worth in the future or what future amounts are worth in today's terms. Understanding inflation is crucial for retirement planning, investment decisions, and long-term financial planning.
Key Features:
- Calculate future value of money after inflation
- Determine present value of future amounts
- Year-by-year breakdown of inflation impact
- Visual charts showing purchasing power erosion
- Professional reporting for financial planning
Frequently Asked Questions
Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. Central banks attempt to limit inflation to avoid deflation.
Inflation is typically measured by the Consumer Price Index (CPI) which tracks the prices of a basket of consumer goods and services over time. In India, it's measured by CPI and Wholesale Price Index (WPI).
The average inflation rate in India has historically been around 5-7% per year, though it can vary significantly from year to year based on economic conditions.
Inflation reduces the purchasing power of money over time. ₹100 today will buy less than ₹100 in 10 years. Understanding inflation helps in setting realistic financial goals and investment targets.
Invest in assets that typically outpace inflation like equities, real estate, and inflation-indexed bonds. Avoid keeping large amounts in low-yield savings accounts for long periods.
Future value shows what today's money will be worth in the future after inflation. Present value shows what future money is worth in today's terms, accounting for inflation.
Inflation significantly impacts retirement planning as it reduces the value of fixed income and savings. Retirement corpus needs to account for 20-30 years of inflation.
The Rule of 72 helps estimate how long it takes for inflation to halve the purchasing power of money. Divide 72 by the inflation rate to get the number of years.