Inflation, simply put is a gradual increase in the rates of goods and services. The cost-of-living increases whenever the inflation rate increases,which adversely affects your purchasing power. Whenever the demand for a product is greater thanthe supply, it causes inflation. Apart from that, another reason is an increase in the production cost.You can prepare yourself against inflation by investing in a top mutual fund that might offer inflation-beating returns.
What is the impact of inflation?
Inflation brings down the value of your currency.Inflation renders the cashin your hand useless because it might not be enough for your expenses. Both luxury and essential products are unaffordable. Be it medicines, important treatments or food, everything is out of reach if you haven’t saved enough. That’s why it is imperative to invest money in your long-term goals. However, calculate inflationbefore you start investing. You can calculate the inflation rate by using an inflation calculator in India.
What is an inflation rate calculator?
An inflation rate calculator evaluates and shows you your money’s worth over time. Identifythe impact of inflation by calculating the consumer price index or CPI. CPI is the costof some goods and services in the current year. Here is the formula for calculating inflation:
Inflation = ((CPI x+1 – CPIx)/ CPIx))*100
How to use an inflation calculator?
You are required to follow just three simple steps for using an inflation rate calculator. They are:
- Record theamount you are currently investing
- Set the inflation rate
- Enter the number of years you’re planning to invest
What are the advantages of these calculators?
These are some benefits of using an inflation calculator:
- Inflation calculators are accurate:
An inflation calculator shows you the potential worth of money at your disposal if it is invested. For instance, you currently invest ₹2,00,000 for 20 years in equity funds.The inflation rate is10%. You would’ve savedapproximately₹13,45,500 in the future.
- They are accessible:
Online inflation rate calculators have replacedphysical calculators. Online calculators are easily accessible.They are accessible because of the internet and don’t cost anything. All you need to do is type ‘inflation calculator India’ in a search engine. Doing so will get you multiple free-to-use online calculators.
- No details are required:
Free online services generally require you to enter personal details. However, that is not the case for using online calculators. You can use the free inflation calculator directly and freely once you click on the link.
- They save time:
Online Inflation calculators present youwith answers in no time. They are more convenient than manual calculations and save time. All you do while using these calculators is enter numbers and click the ‘calculate’ button.
These calculators can help you in preparing a financial plan for acquiring long-term capital. An inflation calculator can help you makeprudent financial decisions and save for the future. These calculators are free and accessible regardless of time. Moreover, you can use these calculators free of cost multiple times. These features make inflation calculators helpful.