Engineering ToolBox - Resources, Tools and Basic Information for Engineering and Design of Technical Applications!

Inflation Rate

Inflation and future value

Sponsored Links
  • 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)


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

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 - in)                  (2)


i1..n = inflation rates of terms

The average inflation rate for all periods can be calculated as

(1 - ia)n = (1 - i1) (1 - i2) ...... (1 - in)                (3)


ia = 1 - [(1 - i1) (1 - i2) ...... (1 - in)]1/n                    (3b)


ia = average inflation rate

Sponsored Links

Related Topics

Related Documents

Tag Search

  • en: inflation rate uniform average future value
Sponsored Links

Search the Engineering ToolBox

Engineering ToolBox - SketchUp Extension - Online 3D modeling!

3D Engineering ToolBox Extension to SketchUp - add parametric components to your SketchUp model

Add standard and customized parametric components - like flange beams, lumbers, piping, stairs and more - to your Sketchup model with the Engineering ToolBox - SketchUp Extension - enabled for use with the amazing, fun and free SketchUp Make and SketchUp Pro . Add the Engineering ToolBox extension to your SketchUp from the SketchUp Pro Sketchup Extension Warehouse!

Translate this page to
About the Engineering ToolBox!


3D Engineering ToolBox - draw and model technical applications! 2D Engineering ToolBox - create and share online diagram drawing templates! Engineering ToolBox Apps - mobile online and offline engineering applications!

Scientific Online Calculator

Scientific Calculator

1 15

Sponsored Links