# Calculate Inflation

I have the below requirement to fulfil. How to achieve this simplistically.

There is an inflation rate table as below

2009, 5%
2010, 5%
2011, 5%
2012, 5%
2013, 5%

I need to first get
2009, 5%, 5
2010, 5%, 5.25             - which is 5% over 5
2011, 5%, 5.5125         - which is 5% over 5.25
2012, 5%, 5.788125     - which is 5% over 5.5125
2013, 5%, 6.07753125 - which is 5% over 5.788125

And then get
2009, 5%, 5                  , 5
2010, 5%, 5.25             , 10.25              = 5.25 + 5
2011, 5%, 5.5125         , 15.7625          = 5.5125 + 10.25 and so on
2012, 5%, 5.788125     , 21.550625
2013, 5%, 6.07753125 , 27.62815625

Using SQL Server 2008 R2 or above
LVL 3
###### Who is Participating?

x

Senior DBACommented:
DECLARE @start_year int
SET @start_year = 2009

SELECT
yi.year, yi.int_rate * 100 AS int_rate, prev_yr.prev_yr_int, curr_yr.curr_yr_int
FROM (
SELECT 2009 AS year, CAST(0.05 AS float) AS int_rate UNION ALL
SELECT 2010 AS year, CAST(0.05 AS float) AS int_rate UNION ALL
SELECT 2011 AS year, CAST(0.05 AS float) AS int_rate UNION ALL
SELECT 2012 AS year, CAST(0.05 AS float) AS int_rate UNION ALL
SELECT 2013 AS year, CAST(0.05 AS float) AS int_rate
) AS yi
CROSS APPLY (
SELECT yi.year - @start_year + 1 AS year_count
) AS year_counts
CROSS APPLY (
SELECT 100 * POWER(1 + yi.int_rate, year_counts.year_count) - 100 AS curr_yr_int
) AS curr_yr
CROSS APPLY (
SELECT curr_yr.curr_yr_int - (100 * POWER(1 + yi.int_rate, (year_counts.year_count - 1)) - 100) AS prev_yr_int
) AS prev_yr
WHERE
yi.year >= @start_year
ORDER BY yi.year
0

Chief Technology OfficerCommented:
One solution is to use a common table expression.

``````WITH cte(Yr, Pct, PctOfOriginal, TotalPct) AS (
SELECT Yr
, CONVERT(DECIMAL(10,8), Pct)
, CONVERT(DECIMAL(10,8), Pct)
, CONVERT(DECIMAL(10,8), Pct)
FROM your_table
WHERE Yr = 2009

UNION ALL

SELECT nxt.Yr
, CONVERT(DECIMAL(10,8), nxt.Pct)
, CONVERT(DECIMAL(10,8), (1+prv.TotalPct)*(1+nxt.Pct)-(1+prv.TotalPct))
, CONVERT(DECIMAL(10,8), (1+prv.TotalPct)*(1+nxt.Pct)-1)
FROM cte prv
JOIN your_table nxt ON nxt.Yr = prv.Yr+1
WHERE nxt.Yr <= 2013
)
SELECT *
FROM cte
;
``````

The idea is to step through the small list of years and use values from previous calc.  You could do this with subqueries also, but thought the CTE approach was a little more manageable.  You may not need the CONVERT code, but recursive query needs same data type in the anchor and recursive queries.

In SQL 2012, you may be able to leverage the enhanced features of the OVER() analytic clause with functions like SUM() as well as the LEAD() and LAG() functions.
0

Chief Technology OfficerCommented:
Scott, I did not see your post.  I think I like the use of the compound interest formula better than my approach.  I think I saw a table and thought the rates could change each year.
0

Commented:
Assuming the rate of 5% is stored as .05 -
select x.year, x.rate, power(1 + x.rate,rn - 1) * 100 * x.rate as newrate, 100 * (power(1 + x.rate, x.rn) - 1) as cum_rate from
(select year, rate, row_number() over (order by year) rn
from inflation_rate) as x
;
0

Commented:
If 5% is stored as 5 -
select x.year, x.rate, power(1 + (x.rate/100),rn - 1) * x.rate as newrate, 100 * (power(1 + (x.rate/100), x.rn) - 1) as cum_rate from
(select year, rate, row_number() over (order by year) rn
from inflation_rate) as x
;
0

Author Commented:
Trying to understand CROSS_APPLY... What does it do?
0

Chief Technology OfficerCommented:
Ref: http://technet.microsoft.com/en-us/library/ms175156(v=sql.105).aspx

In the above, it allows you formulas across each row of the query like you would in the SELECT; however, performing these functions in a CROSS APPLY allows you to use the derived column name in subsequent portions of the query.  For example, the year_count appears in the current and previous interest formulas.
0

Author Commented:
Thanks so much for giving the precious time. Much appreciated!
0
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