How is inflation measured?

Inflation is measured by calculating the percentage change in the Consumer Price Index (CPI) over a certain period of time. The CPI is a measure of the average price level of a basket of goods and services consumed by households. It is calculated by taking the price of a representative sample of goods and services, and comparing it to the price of the same basket in a base year. The percentage change in the CPI is then used as the inflation rate.

The effects of inflation are often not directly felt but are played out over a long time, especially long-term investments are vulnerable to inflation.

 

At Horizon65, we created a mobile app that enabled you to check the effect of inflation on your savings.

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