Calculating your inflation rate is straightforward once you know the Inflation Rate formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Inflation Rate Calculator.
What is Inflation Rate?
The Inflation Rate calculation tells you your inflation rate from a few simple inputs. The figure you are solving for here is the inflation rate, expressed in percent.
The Inflation Rate formula
The core formula is:
Inflation rate = (Later price or index - Earlier price or index) ÷ Earlier price or index × 100Here is what each input means:
- Earlier price or index — a number. Example: 100.
- Later price or index — a number. Example: 106.
How to calculate it step by step
- Write down the earlier price or index (for example, 100).
- Write down the later price or index (for example, 106).
- Apply the formula above to get your inflation rate.
- Double-check the result with the Inflation Rate Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Earlier price or index | 100 |
| Later price or index | 106 |
| Inflation rate | 6.0000% |
With earlier price or index of 100 and later price or index of 106, the inflation rate works out to 6.0000%.
Example 2
With earlier price or index of 200 and later price or index of 106, the inflation rate works out to -47.0000%.
| Result | Value |
|---|---|
| Inflation rate | -47.0000% |
Example 3
With earlier price or index of 50 and later price or index of 106, the inflation rate works out to 112.0000%.
| Result | Value |
|---|---|
| Inflation rate | 112.0000% |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
- Annual rates must be converted to the period you are calculating for (for example, divide an annual rate by 12 for a monthly figure).
Prefer not to do the maths by hand? — the Inflation Rate Calculator does it instantly, for free, with the formula and a worked example built in.
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