Buying Power Calculator

Formatting only. This does not change the calculation.
The price, cost or sum of money measured at the starting date. Zero is allowed and returns zero.
Periods of compounding in rate mode. In index mode it is used only to annualise the measured change; set it to the number of years between the two readings.
Index mode only. For example the CPI-U annual average for the earlier year.
Index mode only. Must come from the same published series and base period as the starting index.
Amount at the later price level
125.00
Inflation & Purchasing Power Calculator
Increase in the amount
25.00
Cumulative price factor
1.250000
Total price change
25.0000 %
Rate per period (compounded)
2.256518 %
What the base amount still buys
80.00
Purchasing power lost
20.0000 %
Worked out from Compound escalation, researched contract ESCALATION (Compound Cost Escalation Calculator) and 2 other sources.
Both index readings must come from the same published series, geography, item scope and base period, and from a final rather than provisional release.

How this is worked out

5 steps
  1. Cumulative price factor = end index / start index = 125 / 100 = 1.25.
  2. Amount at the later price level = 100 x 1.25 = 125.
  3. Total price change = (1.25 - 1) x 100 = 25%.
  4. The same 100 at the later price level buys 100 / 1.25 = 80.
  5. Rate per period = factor^(1/10) - 1 = 2.256518%.

Results are general information, not financial, tax, legal, medical or engineering advice.