Inflation Rate Formula

This page holds the inflation rate formula to calculate the purchasing power using the consumer price index (CPI) in percentage. Purchasing power is the financial ability to buy products and services. The inflation rate is defined as the rate of change of a price index over a specific period. The inflation rate is similar to consumer price index except that inflation rate includes more goods and services and retail prices than consumer price index.

Purchasing Power Formula using CPI

Formula :

Purchasing Power = Amount of money x (CPI (this year) / CPI (last year))
Inflation Rate = CPI (this year) - CPI (last year) / CPI (last year) x 100

Related Calculator:

The rate of inflation formula measures the percentage change in purchasing power of a particular currency. It uses the consumer price index which is released by the Bureau of Labor Statistics in the US.

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