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  • Expenditure Table With Inflation Rate

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    The document provides a table to help calculate future annual expenditures based on inflation rates over different periods of time. The table shows inflation rates of 3%, 4%, 5%, and 6% over 5, 10, 15, 20, and 25 years. An example is given of calculating future annual expenditures of $87,644 in 20 years for a current annual expenditure of $40,000 with an inflation rate of 4%. The conclusion is that compounding expenditures over 20 years at 4% inflation will more than double expenditures, so inflation is an important concern.

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    Inflation

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    The document provides a table to help calculate future annual expenditures based on inflation rates over different periods of time. The table shows inflation rates of 3%, 4%, 5%, and 6% over 5, 10, 15, 20, and 25 years. An example is given of calculating future annual expenditures of $87,644 in 20 years for a current annual expenditure of $40,000 with an inflation rate of 4%. The conclusion is that compounding expenditures over 20 years at 4% inflation will more than double expenditures, so inflation is an important concern.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    3 views1 page

    Expenditure Table With Inflation Rate

    Uploaded by

    engkankw
    The document provides a table to help calculate future annual expenditures based on inflation rates over different periods of time. The table shows inflation rates of 3%, 4%, 5%, and 6% over 5, 10, 15, 20, and 25 years. An example is given of calculating future annual expenditures of $87,644 in 20 years for a current annual expenditure of $40,000 with an inflation rate of 4%. The conclusion is that compounding expenditures over 20 years at 4% inflation will more than double expenditures, so inflation is an important concern.

    Copyright:

    © All Rights Reserved
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    of 1

    Issue no.

    3 2010 A Quarterly Publication

    Annual Expenditure Table


    Personal & Family Expenditure
    Rental for Lodgings
    Utilities & Communication

    To determine how much


    your annual expenditure will
    increase over a period of time,
    refer to Table 1.
    Table 1: Rates of Inflation Over Time

    Grocery & Household needs

    Inflation Rate

    Eating out

    No. of
    Years

    3.0%

    4.0%

    5.0%

    6.0%

    Clothing & Apparel

    5 years

    1.1593

    1.2167

    1.2763

    1.3382

    Transportation

    10 years

    1.3439

    1.4802

    1.6289

    1.7908

    15 years

    1.5580

    1.8009

    2.0789

    2.3966

    20 years

    1.8061

    2.1911

    2.6533

    3.2071

    25 years

    2.0938

    2.6658

    3.3864

    4.2919

    Medical & Personal Care


    Personal Expenses
    Household maintenance & Conservancy charges
    Domestic Help
    Childrens care, Education & Enhancement programmes
    Dependant contributions
    Taxes

    For instance, if your current


    annual expenditure is $40,000,
    and you wish to find out how
    much your current annual
    expenses will be in 20 years time,
    based on a 4% inflation rate:

    Entertainment

    1. Look under the column on


    the extreme left and go
    down to the cell indicating
    20 years. Then look across
    that row until it meets the
    column with the inflation
    rate of 4%. You will find the
    factor of 2.1911 in this cell.

    Festive Spending
    Vacations
    Charity contributions
    Property Loan repayment
    Vehicle Loan repayment
    Insurance premiums
    Others
    Annual Expenditure (based on current costs of living)

    2. Take this factor of 2.1911


    and multiply it by your
    annual expenditure of
    $40,000, to derive future
    annual expenditure, which
    is $87,644 in this case.

    Yes, compounding your expenditure over 20 years


    at 4% will more than double your expenditure!
    Now, shouldnt we be concerned about inflation?

    First Principal Financial Pte Ltd


    24 Raffles Place #14-02 Clifford Centre Singapore 048621
    Tel: 6220 5333 Fax: 6220 5377
    Email: enquiry@firstprincipal.com
    www.firstprincipal.com

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