Inflation Calculator

Inflation is often described by economists as the "invisible tax." It is the rate at which the general level of prices for goods and services in an economy rises, causing the purchasing power of your money to fall.

Because of inflation, ₹100 today is fundamentally worth more than ₹100 tomorrow, because today's ₹100 can buy more goods.

This tool performs two different types of mathematical calculations depending on what you want to know:

• Future Cost (Forward): If a car costs ₹10 Lakhs today, what will it cost in 10 years at 6% inflation? This uses the standard compound interest formula: FV = PV * (1 + r)^n
• Purchasing Power (Backward): If I save ₹10 Lakhs in cash under my mattress for 10 years, how much will it actually be "worth" in today's money when I finally spend it? This uses the present value formula: PV = FV / (1 + r)^n

The math reveals why hoarding physical cash is financially dangerous. If inflation is running at 6% annually, and you keep your money in a standard savings account earning only 3% interest, your Real Return is negative (-3%).

Even though the absolute number in your bank balance is going up every month, you are quietly getting poorer every single day because the cost of goods in the real world is rising much faster than your wealth.