1. ©G Dear 2009 – Not to be sold/Free to use
General Mathematics
Preliminary
Investing
Money
Inflation and
Appreciation
Stage 6 - Year 11
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©G Dear 2009 – Not to be sold/Free to use

2. Inflation and Appreciation (1/3)
The measure of the rate at which prices increase.
Inflation Rate
Inflation as a percentage.
Also called the CPI.
Consumer Price Index

3. Inflation and Appreciation (2/3)
Example
The cost of a vintage car is $
Inflation Rate is 3% p.a.
What is it’s value after 1 year?
Future value =
103%
x $50 000
= 1.03
x $50 000
= $51 500

4. Inflation and Appreciation (3/3)
Example
The cost of a vintage car is $
Inflation Rate is 3% p.a.
What is it’s value after 10 years? 10
Future value =
50 000
x ( ) 10
= $ x 1.03
= $
Use A=P(1+r)n