Money of day

[Huggy]

I have a requirement to back date budget data. I have a budget amount for
2008 of $9,400,000 but need to enter a value in budget spreadsheet for 2007
$$$ based on 2.5% CPI. What formula do I use to discount 2008 value to 2007
value baed on 2.5% CPI?
Thanks

 

[ShaneDevenshire]

Hi,

=2400000/1.025

 

[Huggy]

Thanks, what if I need to back date it two years to 2006?

 

[ShaneDevenshire]

Hi,

2.5%= .025

Here is what I'm doing x+2.5%*x = 2,400,000
which is 1.025*x=2,400,000
so x = 2,400,000/1.025

If the rate for the increase was the same from 2006 to 2007 as it was from
2007 to 2008 then use the same approach. Since the formula above gave
2,341,463.41463415 the next one would be
x = 2,341,463.41463415/1.025

I'm assuming this is a straight percentage increase.

 

[JLatham]

If the CPI varies year to year, you have to calculate backwards individually.

That is it would go something like this, and I'll use the [YEAR] to
represent the dollar value for a given year
So for 2007 to 2008 you had the .025 CPI, as Shane noted
[2007]=2008/1.025
and if the CPI for 2006 to 2007 was .035, then
[2006]=[2007]/1.035
and so on and so forth back to when gasoline was 35 cents a gallon and on
back to when bread was a penny a loaf.