Thursday, August 14, 2008

Breaking its own record

The inflation figure has risen to 12.44% for this week. Already, rice is costing Rs.32 a Kg, as I heard. Projecting this for another year, with the same inflation rate, I see that it would have increased to Rs.36.

The worst part of calculating the future price of a commodity is that the interest is compounding. While the inflation rate is applied to Rs.32 for the next 1 year, it would be applied for Rs.36 for the following year and so forth. :-(

Truly, inflation is breaking its own record (our head too) each week!!!

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