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This is to inform you that scheme names have been changed for Nippon India ETFs with effect from 1st July 2022, for more details click on the Addendum. Thank you for your patronage!

 Content Editor

Inflation Calculator, Future Value Calculator

Worried about the real value of your returns getting depleted with time? Use this calculator to know how much you will need to invest with changing inflation and interest rates. Keep your financial plan updated.

Current Cost
Inflation Rate (PA)
Period (No of Years)
  • Current Cost

  • Inflation (% per annum)

  • Number of Years

Future Cost

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How do you verify if your current investments are profitable after factoring in the current inflation rate?

Did you know that the value of Rs 100 will reduce in the future? Putting it differently, Rs 100 today has more purchasing power than Rs 100 on a future date. The buying power of money decreases with time and this phenomenon is called inflation. Inflation can be defined as a gradual increase in the prices of goods and services such that a rupee today can buy you more goods and services than it can in the future.

Sure, you have heard of it. The smart thing to do is to factor in the inflation while planning your investments. Hence, your investment needs to earn a rate of return that beats the inflation rate. In short, you need to maximise your inflation-adjusted returns. A simple thumb rule is that your investments should generate a rate of return greater than the current inflation rate for a specified investment duration.

How do you verify if your current investments are profitable after factoring in the current inflation rate?

A future value inflation calculator will help you understand the future value of your investments based on the current inflation rate. Look at the tables below to understand the concept better with a hypothetical mutual fund investment example.

Investment Date Investment duration Principal amount Inflation-adjusted principal (Inflation rate = 5.52%)
May 6, 2021 2 years 1,00,000 Rs 1,11,345

So, basically your mutual fund redemption value must be higher than the inflation-adjusted principal of Rs 1,11,345 and not your principal of Rs 1,00,000. A future value inflation calculator helps you understand the true earning potential or real returns of an investment sans external economic factors. As inflation reduces your gains and increases the magnitude of losses, a future value inflation calculator is a very useful tool for designing your investment portfolio. It is an amazing tool for retirement planning too.

Disclaimer: The above results are for illustration purpose only. Please get in touch with a professional advisor for a detailed suggestion. The calculations are not based on any judgments of the future return of the debt and equity markets / sectors or of any individual security and should not be construed as a promise on minimum returns and/or safeguard of capital. While utmost care has been exercised while preparing the calculator, NIMF does not warrant the completeness or guarantee that the achieved computations are flawless and/or accurate and disclaims all liabilities, losses and damages arising out of the use or in respect of anything done in reliance of the calculator. The examples do not purport to represent the performance of any security or investments. Given the individual nature of tax consequences, each investor is advised to consult his/her professional tax/financial advisor before making any investment decision.

The information/illustrations provided herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. The sponsor, the Investment Manager, the Trustee or any of their directors, employees, affiliates or representatives (“entities & their affiliates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Entities & their affiliates including persons involved in the preparation or issuance of this material shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material. Recipient alone shall be fully responsible for any decision taken on the basis of this document.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

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