Replies to post #44241 on A.I.M. Users Bulletin Board (AIMUSERS)

[ls7550]

Hi Toofuzzy

If you want to increase 2% annually but want to do the increase monthly ( it will end up being a compounded rate I think)

.02 x 1/12 or ( .083333 ) = .0016666

So PC x 1.0016666 monthly

I think Clive's # gets rid of the compounding effect.

But why complicate things?

As ever, much less fuzzy than me. Yes, mine accounts for the compounding, but yes more complicated to calculate and typically for a relatively little overall difference.

Your figure : 1.0016666^12 = 1.02018354089 .. subtract the 1 and 0.02018354089 = 2.018354089% annualised inflation rate (versus 2% intended figure) is near as a insignificant difference.

Clive