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Latest comment: 16 years ago1 comment1 person in discussion
Consider: 100 apples cost £1 at the beginning of the year, and they cost £1.25 at the end of the year. That is 25% inflation. Since 1 divided by 1.25 is 0.8, £1 now buys 80 apples. The pound has therefore lost 20% of its value. To calculate this generally, for inflation rate R, divide R by R+1 (or, if you prefer, divide R by R+100%). 100.04% divided by 200.04% gives a loss of 50.01%. —Preceding unsigned comment added by Phoogenb (talk • contribs) 17:20, 5 May 2008 (UTC)Reply
