New answers tagged inflation
This should be covered in the text of your policy. Either an inflation adjustment is built into it, or not. If it is, your premiums will go up in parallel with the value insured. If not, the policy will lose real value until/unless you explicitly adjust it upward by submitting a new appraisal and having them adjust the insurance coverage and premium rate. ...
Suppose you have $100 today and suppose that hamburgers cost $5. If you are holding $100, you could buy 20 hamburgers at $5 each. Now suppose you take that $100 and stuff it under your mattress for 24 years. When you pull out your money, you still have $100, but it turns out hamburgers now cost $10. The increase from $5 to $10 is inflation. Your ...
The Excel formula would be, with the initial price in A1 (say 200) and the inflation rate in A2 (say 0.03 or 3%): =A1 * (1 + A2) ^ 30 As already noted, that is probably not a very realistic model.
If you assume a specific inflation rate per year (x%), the price in a year will be (100+x)% times the current price. The price in two years will be (100+x)% of the price in one year, and in 30 years the price will be (100+x)% raised to the 30th power times the current price. (Clarified the wording.) Now all you need to do is find a way to predict what ...
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