Inflation Rate

• An inflation with rising prices will decrease the value of money over time
• A deflation - the opposite of inflation or negative inflation - with decreasing prices will increase the value of money over time

Inflation Rate

The future value of money after periods with uniform inflation rates can be expressed as

F = P (1 - i)ⁿ          (1)

where

F = future value

P = present value

i = average inflation (or deflation) rate per period (positive for inflation, negative for deflation)

n = number of periods

Example - Inflation and Future Value

The future value of an amount of 100 after 10 periods and 4% of inflation rate can be calculated as

F = 100 (1 - 0.04)¹⁰ =

    = 66.5

Future Value of Present Money due to Inflation Rate - Calculator Table

This calculated table visualizes the decrease in future value of present money due to inflation rate and time.

Present Value of Money

Start Year

End Year

Max. Inflation Rate (%)

Download and print Inflation chart - Future Value vs. Present Value and Inflation Rate

Variable Inflation Rate

The future value of money after periods with variable inflation rates can be calculated as

F = P (1 - i₁) (1 - i₂)......(1 - i_n)                  (2)

where

i_1..n = inflation rates of terms

The average inflation rate for all periods can be calculated as

(1 - i_a)ⁿ = (1 - i₁) (1 - i₂)......(1 - i_n)               (3)

or

i_a = 1 - [(1 - i₁) (1 - i₂)......(1 - i_n)]^1/n                    (3b)

where

i_a = average inflation rate

Temperature ^oC
K
^oF

Length m
km
in
ft
yards
miles
naut miles

Area m²
km²
in²
ft²
miles²
acres

Volume m³
liters
in³
ft³
us gal

Weight kg_f
N
lbf

Velocity m/s
km/h
ft/min
ft/s
mph
knots

Pressure Pa
bar
mm H₂O
kg/cm²
psi
inches H₂O

Flow m³/s
m³/h
US gpm
cfm