Adjusting for inflation
Posted on 2015-02-17
What are the calculations necessary to adjust a particular dollar value for inflation?
E.g. I have $A in today's dollars. 35 years from now, assuming inflation is 2.5%, that will be like having $X
And the reverse:
E.g. I anticipate that my investment portfolio will have a value of $B in 35 years. Assuming 2.5% inflation, that's $Y in today's dollars
Is it just as simple as X = A * (1.025^35), and Y = B / (1.025^35) ? Or is it more complicated than that?