calc_purchasing_power: Calculate purchasing power

In R4GoodPersonalFinances: Make Better Financial Decisions

Calculate purchasing power

Description

Calculates changes in purchasing power over time, taking into account the real interest rate.

Usage

calc_purchasing_power(x, years, real_interest_rate)

Arguments

x	A numeric. The initial amount of money.
years	A numeric. The number of years.
real_interest_rate	A numeric. The yearly real interest rate.

Details

The real interest rate is the interest rate after inflation. If negative (e.g. equal to the average yearly inflation rate) it can show diminishing purchasing power over time. If positive, it can show increasing purchasing power over time, and effect of compounding interest on the purchasing power.

Value

A numeric. The purchasing power.

See Also

• How to Determine Our Optimal Asset Allocation?

Examples

calc_purchasing_power(x = 10, years = 30, real_interest_rate = -0.02)
calc_purchasing_power(x = 10, years = 30, real_interest_rate = 0.02)

R4GoodPersonalFinances documentation built on April 4, 2025, 1:48 a.m.