What are inflation-adjusted prices?

What are inflation-adjusted prices?

Inflation-adjusted prices are prices that have been modified to account for inflation, reflecting the true purchasing power.

Why is it important to consider inflation when looking at prices?

Considering inflation is crucial because it helps you understand the real value of money over time, ensuring accurate financial decisions.

Can you give me an example of how inflation affects prices?

Sure! If a product costs $100 today and inflation is 3% per year, in a year it would cost approximately $103 to maintain the same purchasing power.

How do I calculate inflation-adjusted prices?

To calculate inflation-adjusted prices, you can use the formula: Adjusted Price = Original Price × (1 + Inflation Rate) ^ Number of Years.

Where can I find historical inflation rates?

You can find historical inflation rates on government websites, such as the Bureau of Labor Statistics, or financial news sites.