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To calculate the inflation rate, you will need to use the Consumer Price Index (CPI) from the Bureau of Labor Statistics. The formula for calculating the inflation rate is: (CPI in current year – CPI in base year) / CPI in base year x 100. For example, if the CPI in the current year is 110 and the CPI in the base year was 100, the inflation rate would be (110 – 100) / 100 x 100 = 10%.
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.