**How To Calculate Rate Of Inflation**. Typically, the formula requires a particular starting point, whether that be a year or month in the past. The formula for calculating inflation rate is straightforward and just about anyone can easily apply the formula to determine inflation rates.

The rate of inflation formula helps us to understand how much the price of goods and services in an economy has increased in a year. Moderate levels of inflation can promote spending and investment activity. Inflation measures the rate of change in prices of goods & services.

### Rate of Inflation Calculator (Click Here or Scroll Down).

Your personal inflation rate can be far higher than official inflation.

Here are some practical examples, along with the calculator used to calculate the inflation rate. In a market economy where prices are determined by supply and demand, prices simply reflect what Inflation is a general increase in prices , while deflation is a decrease in prices. Inflation measures how the value of currency changes over time.