Frequently Asked Questions (FAQs)
1. What is an Inflation Calculator?
An inflation calculator is a smart tool that helps you understand the “Purchasing Power” of your money in the future. It shows how much the value of your cash will decrease over time due to rising prices.
2. How does inflation affect my savings?
Inflation acts like a hidden tax. If your money is just sitting in a bank account with low interest, its value drops every year. For example, at 6% inflation, what you can buy for ₹100 today will cost much more in 10 years.
3. What is the average inflation rate in India?
In India, the average annual inflation rate usually stays around 6%. This is why financial experts suggest investing in assets that give more than 7-8% returns.
4. Can I beat inflation with Mutual Funds?
Yes! Historically, Equity Mutual Funds have given returns of 12% to 15% over the long term. Since this is much higher than the 6% inflation rate, your wealth actually grows instead of losing value.
5. What is “Inflation-Adjusted Return”?
This is the real profit you make after subtracting the inflation rate from your total returns. If your investment earns 12% and inflation is 6%, your real growth (Inflation-Adjusted) is 6%.
6. Is this calculator free to use?
Yes, the calculator on edata3.com is 100% free for all users. You can check different combinations of investment amounts and years as many times as you like.