Inflation Calculator

Calculate Inflation Returns & Invest in Mutual Funds via SIP

Inflation indicates the rate of change in the cost of goods/services i.e. the change in the purchasing capacity of the rupee.




Current Amount : 0
Future Value : 0

What is the Inflation Calculator?

Inflation calculator assists you in estimating the future cost of any goods/services. Inflation usually refers to the increase in the price or decrease in the purchasing capacity.

For example, at a 5% annual rate of inflation, the value of INR. 5,000 will become INR. 6381.41 in 5 years.

Given the number of years and rate of inflation, the calculator can help you anticipate the estimated future cost of living.

How Does the Inflation Calculator Work?

There are two measures of inflation in India:

  • Customer Price Index (CPI) indicates an increase in retail-level prices.
  • Wholesale Price Index (WPI) refers to price elevation on the wholesale level.

Inflation can be calculated using the CPI.

CPI = (Cost of Fixed Basket of Goods and Services in Current Year/ Cost of Fixed Basket of Goods and Services in Base Year) *100

The rate of inflation can be calculated using CPI data for the two time periods you want to compare (usually a year apart).

Inflation = ((CPI x+1 – CPIx)/ CPIx))*100

CPI_x Is the Consumer Price Index for a specific period in the past.
CPI_x+1 represents the Consumer Price Index for the time period you want to compare to the past

Now, in order to calculate the future cost given the rate of inflation and current value, VNN Wealth’s inflation calculator uses the following formula-

Future Cost = Current Value * (1 + Inflation Rate) ^ Number of Years

Let’s say you are paying INR. 60 for a 1L carton of milk. After 5 years with 6% inflation, you’ll have to pay ~ INR. 80.

Future cost = 60*(1+0.06)^5 = 80.2

Benefits of Using the Inflation Calculator

  • VNN Wealth’s inflation calculator is an easy-to-use, free online tool to calculate future costs.
  • You can try different inputs to estimate the rate of inflation between two values.
  • The calculator shows accurate return and helps you plan your finances.

How to Effectively Use the Inflation Calculator

The inflation calculator can be used to align your investments with the inflation rate. You can invest your money in various instruments to generate inflation-beating returns.

An inflation calculator comes in handy to predict the future cost of things you require in your day-to-day life. That way, you can have an estimated idea of your future expenses.

VNN Wealth inflation calculator is a convenient tool compared to manual calculations.


How is inflation calculated in India?

Inflation in India is calculated using the consumer price index which indicates the average change in price of the goods and services over time. You can use this formula to calculate the inflation rate- ((CPI x+1 – CPIx)/ CPIx)) x 100. Using VNN Wealth inflation calculator would make the calculations easy.

What is the current inflation rate in India?
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