Formulas
Future cost = Amount × (1 + Inflation)^Years
Purchasing power = Amount ÷ (1 + Inflation)^Years
Real return = (1 + Return) ÷ (1 + Inflation) − 1Worked example
Something costing 1,00,000 today will cost about 1,79,085 in 10 years at 6% inflation. Put another way, 1,00,000 kept in cash will only buy what about 55,839 buys today. Invested at 7%, the real return is only 0.94% a year: the money grows to 1,96,715, worth about 1,09,845 in today's terms.
Frequently asked questions
What inflation rate should I use?
For India, long-term consumer inflation has averaged around 5–6%. Education and healthcare costs have often risen faster, around 8–10%. For other countries use the local long-term average.
What is real return?
Your return after inflation — how much your purchasing power actually grows. A 7% FD with 6% inflation gives a real return of under 1%, before tax.
Why not just subtract inflation from the return?
Subtracting is a quick approximation. The exact real return is (1 + return) ÷ (1 + inflation) − 1, which this calculator uses.
Results are estimates for educational purposes only and are not investment, tax or financial advice. Verify figures with your broker or advisor before acting on them.