Calculate inflation rate and purchasing power changes
Inflation Rate: The percentage increase in prices over time. Formula: ((Final CPI - Initial CPI) / Initial CPI) × 100
Purchasing Power: How much goods and services your money can buy. Decreases as inflation increases.
Real vs Nominal: Nominal values are not adjusted for inflation; real values are adjusted to show true purchasing power.
Consumer Price Index (CPI): Measures the average change in prices paid by consumers for goods and services.