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Old 03-26-2012, 09:18 AM   #101
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Also, 3.24% inflation over 10 years is 39.0085%.... but really, when you are talking about 39% or 38%, one could skip the math and describe it as a whole %^(*& lot of inflation.
Especially without raises and/or COLAs, as has been increasingly the case for households over the last few years.
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Old 03-26-2012, 09:23 AM   #102
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Especially without raises and/or COLAs, as has been increasingly the case for households over the last few years.
Not to mention substitution of lesser products when declaring the annual inflation percentage. I can't think of an example right now.
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Old 03-26-2012, 09:24 AM   #103
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Aw, people! Did we not used to do this?

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Old 03-26-2012, 09:25 AM   #104
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Yep! We sure did. We still love it, too.
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Old 03-26-2012, 09:33 AM   #105
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But if we did not retire, then perhaps we might, just might still be able to do dis?




and then dis?




without getting like dis?
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Old 03-26-2012, 09:34 AM   #106
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Aw, people! Did we not used to do this
Actually, the most fun is arguing which formula is most appropriate for modeling a given scenario!

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Old 03-26-2012, 09:19 PM   #107
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I calculate that after 10 iterations, you'd have 59.874 cents (0.95 ** 10, or 0.95 ^ 10 as the kids say these days ).

However, if inflation is defined as an increase in prices, then the corollary of 5% inflation is that after a year, $1 is worth not $0.95, but ($1 / 1.05) = 95.258 cents. Compound that nine further times (10 in total) and you end up with (0.95258 ** 10) = 61.391 cents.

You can check that by calculating (1.05 ** 10) = 1.62889 (that is, $1 invested at 5% compound with no deductions would give you $1.62889 after 10 years), and divide that into 1 => 1.0/1.62889 = 0.61391.
Dammit, I should've known the board was big enough now to include one of you guys. I shoulda stopped at the Rule of 72.

I guess we're lucky that we're only talking a decade of annual inflation and not a century of quarterly inflation.
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Old 03-27-2012, 05:41 AM   #108
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Dammit, I should've known the board was big enough now to include one of you guys. I shoulda stopped at the Rule of 72.

I guess we're lucky that we're only talking a decade of annual inflation and not a century of quarterly inflation.
A century of quarterly inflation @ 1/2% per quarter = 'a mere' 635%.
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