Inflation Calculator
[ktrade_inflation_calculator]
What is Inflation Calculator?
An Inflation Calculator is an online tool that helps you understand how inflation reduces the purchasing power of money over time. Inflation means prices generally rise, so the same amount of money buys fewer goods and services in the future.
KTrade’s Inflation Calculator estimates what your money today may be worth in the future in terms of purchasing power, based on an assumed average annual inflation rate. This helps you plan better for savings, long-term goals, and investment decisions.
How Does the Inflation Calculator Work?
KTrade’s Inflation Calculator uses a simple formula to determine how inflation affects the value of money over a specific period. You enter:
- Present Value = the amount of money today
- Inflation Rate = average annual inflation rate
- Years = time period
Formula (Purchasing Power):
Future Purchasing Power = Present Value ÷ (1 + Inflation Rate/100)^Years
Where:
- Present Value = The amount of money today
- Inflation Rate = The average annual rate of inflation
- Years = The time period you want to calculate for
Example:
If you have PKR 100,000 today and average inflation is 7% per year, then in 10 years the purchasing power of PKR 100,000 may be:If you have PKR 100,000 today and the average inflation rate is 7 percent per year, in 10 years your money will be worth:
Future Purchasing Power = 100,000 ÷ (1.07)^10 ≈ PKR 50,834
This means PKR 100,000 today may feel like ~PKR 50,834 in 10 years, because prices are higher and your money buys less.
Why Use the Inflation Calculator?
KTrade’s Inflation Calculator helps you:
- Understand how inflation can erode the value of savings over time
- Plan long-term goals using more realistic assumptions
- Compare investment returns against inflation (real vs nominal growth)
To protect your purchasing power, you can explore investments that aim to grow faster than inflation.
Invest in Pakistan stock exchange with Pakistan’s leading brokerage house