Inflation Calculator
What money or an investment is worth in today's rupees, and what a purchase will cost later
Worth in Today’s Money
₹1,73,429
- Value on Paper
- ₹3,10,585
- Real Return
- 5.66% p.a.
After inflation the investment gains ₹73,429 in today’s money.
Breakdown
- Starting amount
- ₹1,00,000
- Value on paper
- ₹3,10,585
- Buying power lost to inflation
- ₹1,37,156
- What ₹1,00,000 of shopping costs in 10 years
- ₹1,79,085
- Real return
- 5.66% p.a.
- Worth in today’s money
- ₹1,73,429
Value on paper
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How this is calculated
Formula
real value = P × (1 + r)ⁿ ÷ (1 + π)ⁿ
- P
- = amount today
- r
- = annual return
- π
- = annual inflation
- n
- = years
With your numbers
- 1Grow it at the returnP × (1 + r)ⁿ₹1,00,000 × (1 + 12.00%)^10 = ₹3,10,585
- 2Deflate to today’s rupees÷ (1 + π)ⁿ₹3,10,585 ÷ (1 + 6.00%)^10 = ₹1,73,429
- 3Real return(1 + r) ÷ (1 + π) − 1= 5.66% a year
- Return minus inflation would give 6.00%; the Fisher relation gives 5.66%. The gap grows with the rates and the years.
- Tax on the return is not deducted, so for a taxable investment the real return after tax is lower still.
Frequently Asked Questions
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