# Excel: Monthly costs calculated in Today's Dollars

I have an Excel which is the basis of graph I hope to make presentable.

Excel

ThreeYearCosts.xlsx

I need to consider the time value of money so that the total costs can be shown in todays dollars.

Can someone recall that formula and post that here? Or, even insert it into the Excel.

Thanks.
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\$100 today was worth \$100 divided by (1 plus inflation rate %) raised to the number of years.

So for 3 years, and 1.5% inflation, \$100 was worth \$100 / (1.015)^3 or \$95.63

\$95.63 at the start, \$97.06 end of year 1, \$98.52 end of year 2 and \$100.00 end of year 3.

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Software EngineerAuthor Commented:
Actually,we are talking about a merchants credit card costs as a result of sales. So, with inflation as a consideration, that merchants prices would likely rise and compensate for inflation.

And isn't the "time value of money" discussion based on inflation?

This being the case, there may be nothing to do.

Here's an example...

If the monthly credit card costs are \$1,000, the 36 month cost valuation of that cash flow in today's dollars is \$36,000.

That's because the inflated monthly costs will be worth \$1,000 in today's dollars.

Please check my logic. I think there are no calculations needed...
So, with inflation as a consideration, that merchants prices would likely rise and compensate for inflation. ...And isn't the "time value of money" discussion based on inflation?

That is very subjective. Merchant costs may or may not rise with inflation or rise with their need for profit.

This being the case, there may be nothing to do.

Probably nothing to do, that is correct.

Please check my logic. I think there are no calculations needed...

Yes, because inflation is very low and because the merchant may do what they wish with respect to pricing.
Software EngineerAuthor Commented:
thanks