See what today’s money will be worth later, what today’s prices become, or the inflation rate that took an old price to the one you pay now.
What inflation rate should I use for India?
Retail inflation in India has mostly run between 4% and 7% over the last decade, and the RBI targets 4% with a 2% band either side. Use 6% for general planning. Use 8% to 10% for school fees and medical costs, which rise much faster than the headline number.
Why does my FD lose money even though it pays interest?
Because you compare it against the wrong benchmark. An FD paying 6.5% while inflation runs at 6% gains you 0.5% in real terms, before tax. After tax at 30%, the real return is negative. The balance rises and the buying power falls.
How do I plan a goal that is 15 years away?
Take the cost today, inflate it to the goal date with this calculator, and use that inflated figure as your target. Planning for a ₹20 lakh wedding in 2040 with today’s ₹20 lakh price tag leaves you badly short.
Is inflation the same for everyone?
No. The published rate is an average across a basket of goods. Your personal rate depends on what you spend on. A family paying private school fees and health insurance faces far higher inflation than the headline figure suggests.
What is a real return?
It is your return after inflation. Roughly, subtract inflation from your return: 12% minus 6% is a 6% real return. The exact form is (1 + return) / (1 + inflation) - 1, which gives 5.66%.
How fast do prices double?
At 6% a year, prices double in about 11.9 years. At 8%, in 9 years. That is why a salary that has not risen in five years has quietly become a pay cut.
How do I work out the inflation between two prices I remember?
Use the third mode. Enter the old price, the price now, and the number of years between them. A cinema ticket at ₹80 fifteen years ago and ₹300 today works out at 9.21% a year, which is well above the headline rate. Doing this for two or three things you actually buy tells you far more about your own inflation than the published figure does.