Inflation Calculator

Inflation Calculator India

The rate of price change as compared to a specific category of goods over a particular period is indicated by inflation. It signifies the rise in the prices of goods/services, which indicates a fall in purchasing power. 

What is Inflation?

When the price of goods/services that are used in day-to-day life increases, it is termed as inflation. It indicates a fall in the purchasing capacity of the rupee. Consumer Price Index (CPI) and Wholesale Price Index (WPI) are mainly two measures of inflation.

The consumer price index (CPI) calculates the retail-level changes in price, and the wholesale price index calculates the wholesale-level changes in price.

How Does Inflation Affect Your Savings?

Every investor makes savings and investments with the sole intent of growing money over time. With smart investment, it is easier to fulfill and fund the provisions and financial requirements in the future.

Factors like inflation are unavoidable and can affect the savings by a considerable margin. Inflation impacts the prices of goods and services and lowers the purchasing power of every individual.

Generally, to tackle inflation, investors keep their money in a bank account that offers good interest. However, the interest earned balances out the inflation effect. Hence, it is important to choose the type of investment to tackle inflation better.

How to Prepare to Overcome Inflation?

In any economy, inflation is an inevitable part. To control inflation, the government introduces several fiscal policies. However, a few risks and effects of inflation are beyond the government’s control.

To tackle inflation, you need smart investment planning. Alongside, you must consider the risk related to these investments, which can incur losses. Creating a diversified portfolio and choosing the right investment option that offers good returns in the long term can help you tackle inflation easily.

What is an Inflation Calculator? 

Using the inflation calculator, you can calculate the effect of inflation on purchasing power and capacity. The inflation adjustment calculator allows you to estimate the worth of the same amount of money if invested.

How is Inflation Calculated?

You can calculate inflation by using the consumer price index (CPI). It helps you to measure the change in the price of goods and services by considering the weighted average value of each.

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

Note: Inflation can be calculated using the formula once the CPI for the two years is calculated.

Formula for Inflation

By using the Consumer Price Index (CPI), inflation can be measured: 

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

Note: CPIx is the Initial Consumer Price of the Index

Example of the Calculation of Inflation

To calculate inflation using the Consumer Price Index (CPI):

Inflation (%) = ((CPI this year – CPI last year) / CPI last year) × 100

• CPI last year = 150
• CPI this year = 165

Inflation = ((165 – 150) / 150) × 100
Inflation = (15 / 150) × 100 = 10%

So, prices increased by10% compared to last year.

Benefits of Inflation Calculator

Here are a few of the benefits of using an inflation calculator:

• Our inflation calculator is free; you can use to calculate as many times as you wish.
• Using the inflation calculator, you can check the investment opportunity of the various investment options.
• BlinkX’s Inflation calculator is simple to use; you just have to enter the amount to check the purchasing power of the same in the coming years.
• As compared to manual calculations, BlinkX’s Inflation calculator offers you accurate results in a few seconds.