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Compare Inflation scenarios

Change one input, hold everything else identical, and see how much that one input is actually worth. The gap between the scenarios is the whole answer.

What to compare

Everything else below is held identical across the scenarios, so the only thing separating the lines is this one input.

Shared by every scenario

Side by side

Future cost for each scenario, with every other input held identical
ScenarioAssumed inflation rateFuture cost
Scenario A3%₹1,34,392
Scenario B6%₹1,79,085
Scenario C9%₹2,36,736

Moving assumed inflation rate from 3% to 9% changes future cost by +₹1,02,345. Every other input was identical in both.

Show how each scenario is calculated

Scenario A — 3%

  1. Write inflation as a decimal

    3% ÷ 100

    = 0.03

  2. Compound it over the period

    (1 + 0.03)^10

    = 1.343916

  3. What the same basket costs later

    ₹1,00,000 × 1.343916

    = ₹1,34,392

Scenario B — 6%

  1. Write inflation as a decimal

    6% ÷ 100

    = 0.06

  2. Compound it over the period

    (1 + 0.06)^10

    = 1.790848

  3. What the same basket costs later

    ₹1,00,000 × 1.790848

    = ₹1,79,085

Scenario C — 9%

  1. Write inflation as a decimal

    9% ÷ 100

    = 0.09

  2. Compound it over the period

    (1 + 0.09)^10

    = 2.367364

  3. What the same basket costs later

    ₹1,00,000 × 2.367364

    = ₹2,36,736

Every scenario is computed by the same engine the future cost calculator uses, so the last line of each is the figure in the table above. Intermediate values are shown rounded for reading; the calculation carries full precision throughout.

Over time

Each line is one scenario. Because every other input is identical, the gap between them is the effect of assumed inflation rate alone.

How to read this

  • Only one input differs. Every other value is identical across the scenarios, which is what makes the gap between them readable. If each scenario had its own assumed return, the chart would be comparing guesses rather than choices.
  • A bigger number is not automatically better. On a loan comparison the larger figure is the worse one, and on any of these the right answer depends on circumstances this page knows nothing about.
  • The rate is still an assumption. Comparing scenarios does not make any of them a forecast — it only shows how sensitive the outcome is to the input you changed.

To see the arithmetic behind a single scenario, use the Inflation Calculator, which shows the formula and works it through with your numbers.