Inflation Calculator — What Is Your Money Actually Worth?
By sadiqbd · June 6, 2026
৳10,000 today won't buy what ৳10,000 bought five years ago
Most people feel this intuitively — groceries cost more, rent has gone up, a restaurant meal that used to be ৳300 is now ৳450. But "things cost more" is vague. Inflation is precise: it's the percentage rate at which the purchasing power of money erodes over time.
Understanding inflation matters beyond dinner prices. It affects how you should think about salary negotiations, savings targets, retirement planning, and whether keeping money in a low-interest account is actually costing you in real terms. An inflation calculator makes these questions answerable with actual numbers rather than vague concern.
What Inflation Actually Measures
Inflation is typically expressed as an annual percentage — the rate at which a basket of goods and services gets more expensive over a year. When inflation runs at 6%, something that cost ৳1,000 last year costs ৳1,060 this year.
The formula that ties future and present value together through inflation is:
Future Value = Present Value × (1 + inflation rate)^number of years
Or working backwards to find what a future amount is worth in today's money:
Present Value = Future Value ÷ (1 + inflation rate)^number of years
So ৳5,00,000 today at 6% average annual inflation for 20 years:
Future cost = 5,00,000 × (1.06)^20 ≈ ৳16,03,568
That same ৳5 lakh will only cover what roughly ৳1,56,308 covers today. That's the real-world impact of two decades of 6% inflation — your money's purchasing power drops to about 31% of what it was.
How to Use the Inflation Calculator on sadiqbd.com
- Enter the current amount — this could be the price of something today, your current monthly expenses, or a savings target.
- Enter the annual inflation rate — use a realistic estimate. Bangladesh's average CPI inflation has historically ranged between 5–10%. For conservative planning, 7–8% is a reasonable assumption. For global purchasing power, use the relevant country's rate.
- Enter the number of years — how far into the future you're projecting, or how far back you want to compare.
- Read the result — the calculator shows either what the amount will be worth in the future (adjusted for inflation) or what it was worth in the past in today's money.
Real-World Examples
What will your monthly expenses cost at retirement?
Farhan currently spends ৳50,000 per month on household expenses. He plans to retire in 25 years. At 7% average annual inflation, what will the same lifestyle cost then?
Future expenses = 50,000 × (1.07)^25 ≈ ৳2,71,372 per month
That's more than five times his current expenses. If he builds a retirement corpus assuming ৳50,000/month in today's money without adjusting for inflation, he'll be dramatically underfunded. The inflation calculator makes this gap visible long before it becomes a crisis.
Is your salary keeping up?
Priya earned ৳60,000 per month three years ago. She now earns ৳68,000. Inflation over those three years averaged 6.5% per year.
What should her salary be just to maintain the same purchasing power? 60,000 × (1.065)^3 ≈ ৳72,584
She's earning ৳68,000 but would need ৳72,584 to stay even. In real terms, she's taken a pay cut despite the nominal increase. That's a concrete number to bring to a salary negotiation.
What did a price cost in the past?
A family remembers paying ৳8,000/month rent 10 years ago. The same flat now rents for ৳18,000. Was that increase above or below inflation?
At 7% average inflation, ৳8,000 from 10 years ago is equivalent to: 8,000 × (1.07)^10 ≈ ৳15,737 today
The flat now costs ৳18,000 — that's an increase above general inflation. Rents in that area grew faster than the general price level. Useful context for negotiating or deciding whether to renew.
Savings account reality check
Jamal has ৳3,00,000 in a savings account earning 4% annual interest. Inflation is running at 6.5%.
His nominal balance after 5 years: 3,00,000 × (1.04)^5 ≈ ৳3,64,996 What ৳3,00,000 needs to be worth in 5 years to maintain purchasing power: 3,00,000 × (1.065)^5 ≈ ৳4,10,635
He's falling short by about ৳45,639 in purchasing power terms. His savings account is actually losing real value, just slowly and invisibly. The inflation calculator makes the invisible visible.
The Numbers That Matter: Understanding Different Inflation Rates
Not all inflation is the same, and using the wrong rate leads to wrong projections.
General CPI inflation is the most widely reported figure — it tracks a broad basket of consumer goods. This is the right rate to use for general cost-of-living projections.
Education inflation typically runs 2–3 percentage points above general CPI. If you're saving for a child's higher education, using the general CPI rate will understate what you'll actually need.
Medical/healthcare inflation is often even higher — 10–15% in many South Asian markets. Retirement planning that doesn't account for rising healthcare costs significantly underestimates required corpus.
Food inflation can spike well above general CPI during supply shocks. Over the long run it tends to revert, but for short-term household budgeting, tracking food prices separately makes sense.
When using the inflation calculator for specific planning purposes — education, healthcare, property — use the sector-relevant rate rather than general CPI for more accurate projections.
Practical Tips
Use inflation-adjusted targets, not nominal ones. If your goal is to have ৳50 lakh for retirement, that's a nominal target. The real question is: what does ৳50 lakh buy in 25 years? Run the inflation calculator in reverse — how much do you need in future rupees/taka to match what ৳50 lakh buys today?
Re-run your calculations every 2–3 years. Inflation rates shift over time. A projection made in 2020 using historical rates may be significantly off given how inflation behaved in 2022–2023 globally. Updating your calculations periodically keeps your plan accurate.
Combine with investment calculators. The inflation calculator tells you what things will cost. The SIP or Compound Interest Calculator tells you what your investments will grow to. The gap between those two numbers is what your actual planning needs to close.
Express everything in real terms when comparing. ৳1 crore in 2045 is not the same as ৳1 crore today. When comparing savings milestones or financial goals across time, always convert to today's purchasing power for an apples-to-apples comparison.
Don't panic at large future numbers. A monthly expense of ৳2.7 lakh in 25 years sounds alarming. But your income and assets will also (hopefully) grow over that period. The inflation calculator shows the challenge; your investment plan addresses it.
Frequently Asked Questions
What inflation rate should I use for projections in Bangladesh? Bangladesh's CPI inflation has averaged roughly 6–8% over the past decade, with spikes above 9% in 2022–2023. For long-term planning, 7% is a commonly used conservative estimate. For more conservative scenarios, 8–9% is reasonable.
Can the inflation calculator work backwards to historical prices? Yes — just set the time period in reverse (from past to present). Enter the old price, the number of years, and the average inflation rate to see what that amount is equivalent to today.
Does inflation affect all goods the same way? No. Inflation is an average. Some items (electronics, for example) often get cheaper in real terms over time. Others (healthcare, education, urban property) tend to rise faster than general CPI. Use sector-specific rates for planning in those areas.
What's the difference between CPI and WPI inflation? CPI (Consumer Price Index) measures prices from a consumer's perspective — what households pay. WPI (Wholesale Price Index) measures prices at the producer/wholesale level. For personal financial planning, CPI is the relevant measure.
Is the inflation calculator free? Completely free — no sign-up, no ads, use it as many times as you need.
Inflation is one of those forces that works quietly in the background, making plans go stale and savings targets obsolete without anyone noticing until it's too late. The right time to account for it is during planning, not after. Putting real numbers on it takes 30 seconds.
Try the Inflation Calculator free at sadiqbd.com — see exactly what your money will be worth, and plan accordingly.
