Precision Financial Calculator

Example 4-1 Inflation Calculation

Assume the annual inflation rate is 3% from 1980 to 1999. What is the value of an asset in 1999 which is valued $100,000 at the beginning of 1980?

[Answer: $175,350.61]


Go to the Inflation tab. Click the New button to create a new Inflation data set. Enter 1980 to the Starting Year box and 1999 to the Ending Year box. Check the Default Inf Value checkbox and enter 3 to the text box. Click the Apply button. You will see the inflation data on the left. The starting year and ending year in the calculation box are automatically set to 1980 and 1999. Enter 100,000 to the left text box, then click the right arrow button. You will see the answer. Try to select different years to get different results.

Select Mid-Year Convention if the values are measured at the middle of the year. You may edit the inflation data on the worksheet anytime and watch the instant changes on the calculation.


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