Inflation is the rate at which the general price level of goods and services rises, reducing the purchasing power of money over time.

How does inflation affect purchasing power?

As inflation increases, the same amount of money buys fewer goods and services, reducing its real value.

How is future cost calculated?

Future cost is calculated using compound inflation: Present Cost × (1 + inflation rate)^years.

Is inflation always bad?

Moderate inflation is normal in growing economies, but high inflation erodes savings and purchasing power.

Is your cash shrinking?

Calculate how inflation affects your purchasing power and the future cost of your lifestyle.

Currency

Current Amount / Monthly Expense

Enter your savings or monthly household expenses.

Inflation Rate (%) 3.5%

Mild (1%) Hyper (15%)

Time Period 10 Years

Projected Future Cost

$0

Purchasing Power Erosion

Today 100% Value

70%

In Future

Your money effectively loses 30% of its value.

Future Value of Money $0

*To buy the same things you buy today for $1000, you will need $1400.

The Silent Tax

Inflation acts as a hidden tax on cash savings. To beat it, your investments must earn a return rate higher than the inflation rate.

Why does everything cost more?

Have you noticed your grocery bill creeping up even though you are buying the same items? That is Inflation. It is the rate at which the general price of goods and services rises, causing the purchasing power of your currency to fall.

This calculator helps you visualize two things: how much your current lifestyle will cost in the future, and how much value your cash savings will lose if kept idle.

The Logic

Inflation compounds over time, similar to interest, but working against you.

Formula:
Future Cost = Present Cost × (1 + rate)^years

Real World Example

Coffee today: $5.00
Inflation Rate: 4%
Time Period: 20 Years
Coffee in 2044: $10.95

The price more than doubled, meaning your money lost 50% of its strength.

How to beat Inflation?

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Don't Hoard Cash

Money kept under a mattress or in a low-interest checking account guarantees a loss in value.

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Equities

Historically, stock markets have delivered returns (8-10%) that outpace average inflation (3-4%).

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Real Assets

Real estate and gold are classic hedges because their prices typically rise along with inflation.

Want to protect your money from inflation? Try our Fixed Deposit Calculator or SIP Calculator .

Common Questions

What is the Rule of 72?

The Rule of 72 is a quick way to estimate how long it takes for prices to double. Divide 72 by the inflation rate. For example, at 6% inflation, prices will double in 12 years (72 ÷ 6 = 12).

Is deflation good?

Deflation (falling prices) sounds good for consumers, but it can be bad for the economy. It increases the real value of debt and can lead to lower wages and unemployment. Central banks usually target a low, positive inflation rate of around 2%.