How it is calculated
The percent is applied to a sum that has already been indexed, so the growth compounds once a year. Inside the year it is not split.
Total = amount × (1 + percent) ^ years
Where the numbers come from
- Amount
- Percent per year — unit in the field: %
- Years
Example
100 000 currency units at 10% a year for 3 years gives 100 000 × 1,1³ = 133 100 currency units.
Questions
Can the percent be negative?
Yes. The sum then gets smaller. At minus 100% the result is zero. A steeper fall takes the sum below zero, which no longer means anything for a wage.
Is this an inflation forecast?
Only if you yourself expect the percent to stay put. The inflation calculator next to this one works out the loss of buying power at a rate you already know.
Is the first year included?
Yes: after 1 year the amount has already been multiplied by the factor once.