MCL380

SPL. TOPICS IN MECHANICAL

ENGINEERING
COURSE OVERVIEW
Consumer price index (CPI)
INFLATION RATE
CPI = Consumer Price Index

Inflation and Deflation

Future worth of currency in the reference period that
inflated (or deflated) with certain rate

It can be positive (inflation) or negative ( deflation).

Future worth of present (F)

Real rate of discount

i = -1
 - market or nominal discount rate (in nominal
currency) that does not account for inflation
In engineering economics price analysis is
constant / real currency ( amended for inflation).