Inflation and Real Interest
by Anonymous
Adjust the interest rate and inflation to see where the balance on the statement parts ways with what it can actually buy.
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About this app
Inflation and Real Interest is an interactive learning app about the difference between a growing account balance and declining or rising purchasing power. Adjust the interest rate, inflation rate, and time period to compare nominal balance growth with what the money can actually buy. Additional challenges demonstrate the exact real rate as a division, the limits of subtraction as an estimate, and how inflation can halve a basket's purchasing power over time.
Use cases
- Adults learning personal finance fundamentals
- Students exploring inflation and real interest
- Anyone comparing savings growth with purchasing power
- Educators demonstrating compounding and cognitive biases
Features
- Interactive controls for interest rate, inflation, and years
- Side-by-side comparison of account balance and purchasing power
- Exact real-rate calculation compared with the rate-minus-inflation shortcut
- Purchasing-power view starting from a basket of 100 items
- 72-rule estimate for the time required for value to halve
- Mission-based exercises with solvable and impossible scenarios