Inflation Calculator
Current Cost
₹1,00,000
Cost Increase
₹33,823
Future Cost
₹1,33,823
Inflation Calculator
Inflation is the gradual increase in the prices of goods and services over time, leading to a decrease in the purchasing power of money. This means that the same amount of money will buy fewer goods and services in the future compared to today. Understanding inflation is essential for making sound financial decisions, whether it is for investments, savings, or retirement planning.
To help investors and individuals gauge the effect of inflation, Tradejini offers an Inflation Calculator. This tool estimates how the purchasing power of your money changes over time, considering historical inflation rates.
How the Inflation Calculator Helps You
Using an Inflation Calculator provides several benefits:
- Accurate Forecasting: It helps you estimate the future value of your money based on inflation trends.
- Investment Planning: Allows you to assess how much your savings need to grow to maintain purchasing power.
- Quick and Easy: Eliminates the need for manual calculations by delivering instant results.
- Free to Use: Tradejini’s inflation calculator is accessible at no cost, making it a valuable financial planning tool.
Formula for Inflation Calculation
Inflation is calculated using the Consumer Price Index (CPI), which tracks changes in the price of a fixed basket of goods and services.
Inflation Rate (%) = ((CPIx+1 – CPIx) / CPIx) × 100
Where:- CPIx+1 = Consumer Price Index for the later year
- CPIx = Consumer Price Index for the initial year
Example Calculation
- CPI in 2023 = 175
- CPI in 2022 = 160
Inflation Rate = ((175 - 160) / 160) × 100 = 9.375%
This means that prices increased by 9.375% from 2022 to 2023.
Let’s take the price of 1 kg of rice as an example:
Price of rice in 2022 = ₹50 per kg
Price of rice in 2023 = ₹55 per kg
Now, using the inflation formula:
Inflation Rate (%) = ((New Price - Old Price) / Old Price) × 100
= ((55 - 50) / 50) × 100
= (5 / 50) × 100
= 10%
This means that the price of 1 kg of rice increased by 10% from 2022 to 2023, reducing the purchasing power of money.
How to Use the Inflation Calculator on Tradejini
Using the Tradejini Inflation Calculator is simple and convenient. Follow these steps:
- Enter the Initial Amount: Input the amount of money whose future value you want to assess.
- Select the Time Period: Choose the number of years you want to project the inflation impact.
- Enter Interest Rate: You can use historical averages or a custom inflation rate.
- Click on Calculate: The tool will instantly display the adjusted value of your money in the future
Advantages of Tradejini’s Inflation Calculator
- User-Friendly Interface: Designed for ease of use, making it accessible for all users.
- Fast and Reliable Results: Generates results within seconds.
- Investment Guidance: Helps plan investments to ensure inflation-beating returns.
- Comprehensive Insights: Provides a clearer picture of long-term financial planning.
