# Inflation Rate Calculator

LAST UPDATE: June 20th, 2018

## What is the inflation rate?

The inflation rate is the rate that the consumer price index (CPI) is increasing. It is listed as a percentage.

As the price level of goods and services change over time, the CPI tracks the changes in prices.

A high inflation rate (considered to be more than 2%) means that prices are going up quickly, a low inflation rate (considered to be between 0 and 2%) means that prices are going up slowly. A negative inflation rate means that prices are going down.

## Formula

$\text{Inflation Rate} = \frac{\text{Current Year's CPI} - \text{Last Year's CPI}}{Last Year's CPI} \times 100$

## Example

If the current year’s CPI is 152 and last year’s CPI is 148, then:

$\text{Inflation Rate} = \frac{152 - 148}{148} \times 100$

$\text{Inflation Rate} = \frac{4}{148} \times 100$

$\text{Inflation Rate} = 0.0270 \times 100$

$\text{Inflation Rate} = 2.70$