00:01
Hey guys, and welcome to the final example in this string of examples about inflation, where we're actually now going to be finally calculating inflation.
00:11
So one thing i actually forgot to mention in the last example is that to keep things quick, i calculated the indexes, i suppose.
00:23
I pluralized that wrong.
00:25
We'll erase that and ignore my mistake.
00:30
So yeah, i calculated the index number based on a basket of goods.
00:37
So i did it on the total.
00:40
You can find out the index numbers for each separate fruit per year and then find out the inflation for each separate fruit per year.
00:50
And i would encourage you to go do that as practice, but to keep things simple and quick, i'm doing it as a basket of goods, so the totals altogether.
01:02
So with that out of the way, let's get to calculating inflation.
01:06
So it's pretty simple.
01:11
Of course, since 2001 is our beginning year, we have no previous year to have the prices go up from.
01:18
So the change in inflation here is just zero.
01:23
Since it's our first year, we can't really calculate inflation for it.
01:26
But going on from there, we can.
01:29
And i will give you the formula for that.
01:35
So it's pretty simple.
01:37
You just take your current index minus your previous one, and then divide it by your previous one...