Rallys Equities
Pakistan Stock Exchange
See how inflation erodes the purchasing power of cash over time.
See how inflation erodes the purchasing power of your cash over time. Why it matters: the inflation rate determines how much value your money loses each year.
Inflation Rate (%) = ((B − A) × 100) ÷ A
Disclaimer: This calculator provides estimates only and does not account for fees, taxes, exit loads, or expense ratios. Actual returns vary due to market conditions.
Inflation measures the rise in the general price level of selected goods and services over a period of time. It reflects the decline in purchasing power of a currency, usually expressed as a percentage. Inflation is an important economic indicator, helping investors and policymakers understand changes in the cost of living.
Inflation impacts the value of money. As prices rise, the currency loses value, meaning it takes more money to buy the same goods and services as before. This affects everyday living expenses and can slow down economic growth, making it a key metric for financial planning and investment decisions.
Inflation rate shows the percentage increase in prices over a specific period. If the inflation rate reaches 100%, it indicates that prices have doubled. For rates above 100%, the Bureau of Labor Statistics (BLS) typically uses a new base year to keep calculations clear. When using the Consumer Price Index (CPI) above 100, subtract 100 to determine the actual percentage increase over the period.
The formula for calculating inflation is:
Where:
Using a Depreciation or Inflation Calculator, you can quickly determine how much the value of money or goods has changed over time, helping you make informed financial decisions.