- 1). Look up the current inflation rate at bls.gov/cpi under the section "CPI Tables." Use the general inflation rate over the past 12 months or use a rate specific to the type of item you purchased or region you live in.
- 2). Express the inflation rate as a decimal and add 1 to it. For example, if the inflation rate is 2.5 percent, compute the number 0.025 + 1 = 1.025.
- 3). Divide the current price of the item by the number you computed in Step 2. This is the price of the item one year ago. For example, suppose you purchase an item today that costs $82. One year ago, that same item would have cost 82/1.025 = $80. The inflation increase is $2.
- 1). Subtract the older price of an item from the newer price of the item. For example, if an item cost $20 in 1985 and $55 in 2005, then the difference is 55 minus 20 = $35.
- 2). Divide the difference by the older price. For example, 35 divided by 20 = 1.4.
- 3). Move the decimal point two units to the right to obtain a percent. This is the inflation rate. For example, 1.4 = 140 percent, so from 1985 to 2005, the inflation increase of this particular item was 140 percent. Note that this may not reflect the overall inflation rate of the time period.
Calculating Inflation Increase One Year Ago
Calculating Inflation Increase with Two Price Points
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