.cpi-calc-container {
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
max-width: 800px;
margin: 0 auto;
padding: 20px;
background: #f9f9f9;
border: 1px solid #e0e0e0;
border-radius: 8px;
}
.cpi-row {
display: flex;
flex-wrap: wrap;
gap: 20px;
margin-bottom: 20px;
}
.cpi-col {
flex: 1;
min-width: 250px;
}
.cpi-label {
display: block;
margin-bottom: 8px;
font-weight: 600;
color: #333;
}
.cpi-input {
width: 100%;
padding: 12px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
}
.cpi-btn {
width: 100%;
padding: 15px;
background-color: #0056b3;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
font-weight: bold;
cursor: pointer;
transition: background 0.3s;
}
.cpi-btn:hover {
background-color: #004494;
}
.cpi-results {
margin-top: 25px;
padding: 20px;
background: #fff;
border-left: 5px solid #0056b3;
box-shadow: 0 2px 5px rgba(0,0,0,0.05);
display: none;
}
.cpi-result-item {
margin-bottom: 15px;
border-bottom: 1px solid #eee;
padding-bottom: 10px;
}
.cpi-result-item:last-child {
border-bottom: none;
margin-bottom: 0;
}
.cpi-result-label {
font-size: 14px;
color: #666;
}
.cpi-result-value {
font-size: 24px;
font-weight: bold;
color: #222;
}
.cpi-error {
color: #dc3545;
margin-top: 10px;
display: none;
}
.article-content {
max-width: 800px;
margin: 40px auto 0;
line-height: 1.6;
color: #333;
font-family: 'Segoe UI', Tahoma, Geneva, Verdana, sans-serif;
}
.article-content h2 { color: #0056b3; margin-top: 30px; }
.article-content h3 { color: #333; margin-top: 25px; }
.article-content ul { padding-left: 20px; }
.article-content li { margin-bottom: 10px; }
.calc-box { background: #f0f4f8; padding: 15px; border-radius: 5px; font-family: monospace; }
function calculateInflationRate() {
// 1. Get input values by ID
var cpiStart = document.getElementById('cpiStart').value;
var cpiEnd = document.getElementById('cpiEnd').value;
var yearStart = document.getElementById('yearStart').value;
var yearEnd = document.getElementById('yearEnd').value;
var errorDiv = document.getElementById('errorMessage');
var resultDiv = document.getElementById('resultContainer');
// Reset error
errorDiv.style.display = 'none';
resultDiv.style.display = 'none';
// 2. Validate inputs
if (cpiStart === "" || cpiEnd === "" || yearStart === "" || yearEnd === "") {
errorDiv.innerHTML = "Please fill in all fields.";
errorDiv.style.display = 'block';
return;
}
var startVal = parseFloat(cpiStart);
var endVal = parseFloat(cpiEnd);
var yStart = parseInt(yearStart);
var yEnd = parseInt(yearEnd);
if (isNaN(startVal) || isNaN(endVal) || isNaN(yStart) || isNaN(yEnd)) {
errorDiv.innerHTML = "Please enter valid numeric values.";
errorDiv.style.display = 'block';
return;
}
if (startVal <= 0) {
errorDiv.innerHTML = "Starting CPI must be greater than 0.";
errorDiv.style.display = 'block';
return;
}
var numberOfYears = yEnd – yStart;
if (numberOfYears <= 0) {
errorDiv.innerHTML = "Ending Year must be greater than Starting Year.";
errorDiv.style.display = 'block';
return;
}
// 3. Calculation Logic
// Total Percentage Change = ((End – Start) / Start) * 100
var totalInflation = ((endVal – startVal) / startVal) * 100;
// Average Annual Inflation Formula (CAGR): ((End / Start)^(1/n) – 1) * 100
var ratio = endVal / startVal;
var exponent = 1 / numberOfYears;
var avgAnnualInflation = (Math.pow(ratio, exponent) – 1) * 100;
// 4. Update Result Display
document.getElementById('annualResult').innerHTML = avgAnnualInflation.toFixed(2) + "%";
document.getElementById('cumulativeResult').innerHTML = totalInflation.toFixed(2) + "%";
document.getElementById('yearsResult').innerHTML = numberOfYears + " Years";
resultDiv.style.display = 'block';
}
How to Calculate Average Annual Inflation Rate Using CPI
Understanding how prices change over time is crucial for economists, investors, and consumers alike. The Consumer Price Index (CPI) is the most widely used metric for tracking these changes. While the CPI gives you a snapshot of price levels at a specific moment, calculating the average annual inflation rate allows you to understand the steady rate at which purchasing power has eroded (or grown) over a period of years.
What is the Consumer Price Index (CPI)?
The CPI is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them. When the CPI rises, the typical family has to spend more dollars to maintain the same standard of living.
The Average Annual Inflation Formula
To calculate the average annual inflation rate, we treat the CPI values as the start and end values of an investment and calculate the Compound Annual Growth Rate (CAGR). This is more accurate than a simple average because inflation compounds over time.
Formula:
Average Rate = [ ( CPIEnd / CPIStart ) (1 / n) – 1 ] × 100
Where:
- CPIEnd: The Consumer Price Index value at the end of the period.
- CPIStart: The Consumer Price Index value at the beginning of the period.
- n: The number of years between the two dates (End Year – Start Year).
Step-by-Step Calculation Example
Let's say you want to calculate the average annual inflation rate between the year 2010 and 2020 using historical US CPI data.
- Starting Year (2010): CPI was approximately 218.06
- Ending Year (2020): CPI was approximately 258.81
- Number of Years (n): 2020 – 2010 = 10 years
Step 1: Calculate the Ratio
258.81 / 218.06 = 1.18687
Step 2: Apply the Exponent (1/n)
1 / 10 = 0.1
1.18687 0.1 = 1.01727
Step 3: Subtract 1 and Convert to Percentage
1.01727 – 1 = 0.01727
0.01727 × 100 = 1.73%
In this example, the average annual inflation rate over that decade was 1.73%. This means that, on average, prices for the basket of goods increased by 1.73% every single year.
Why Use Geometric Mean (CAGR) vs. Simple Average?
It is a common mistake to calculate the total percentage change and divide it by the number of years. In the example above, the total change is about 18.7%. Dividing this by 10 gives 1.87%, which is incorrect. The geometric mean (used in our calculator) accounts for compounding effects, providing the precise rate required to grow the starting CPI to the ending CPI over the specific timeframe.