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Description
Description
Inflationλ() calculates period-specific inflation factors to uniformly adjust amounts for inflation across a reporting period.
How it Works
Input: The function reads an input table containing Annual Inflation Rates and their Effective Dates (when each rate begins).
Conversion to Period Rates: It converts each annual rate into an equivalent period rate (e.g., monthly rate if 12 periods per year) using the formula:
Period Rate = (1 + Annual Rate) ^ (1 / Periods Per Year) -1Factor Calculation: It assigns the calculated period rates starting from each annual rate's effective date and then compounds them over time.
Output: The result is a series of inflation factors (one for each period) that can be multiplied by a monetary amount to adjust that amount for the effect of inflation.
Syntax
Syntax
Inflationλ( Timeline, [EndDates?], InflationRates, EffectiveDates)
Arguments:
Arguments:
Timeline
(Required) The model's timeline
EndDates?
(Optional) TRUE (default), Timeline displays period end dates. FALSE, Timeline display period start dates.
InflationRates
(Required) One or more forecasted annual inflation percentages.
EffectiveDates
(Required) Dates for when each inflation rate is effective. NOTE! The first effective period is when inflation starts. Normally, we do not want the first period to be impacted, in which case, make the first effective date after the first period date.
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