Glossary

Inflation

The general rise in prices over time, which reduces what a given amount of money can buy.

Compound and simple growth 1,000 growing at 5% a year for 30 years reaches about 4,322, worth about 2,386 in today's money with 2% inflation. Year 0 10 20 30 1,000 Compound 4,322 Simple 2,500 After inflation 2,386

Learn it in

← All terms