Investment
Time for purchasing power to halve
How long until rising prices erase half of what an amount buys. At 3% this is 23.45 years — the rule of 72 gives 24 as an approximation.
The Formula
Years = ln(2) / ln(1 + i)
How long until rising prices erase half of what an amount buys. At 3% this is 23.45 years — the rule of 72 gives 24 as an approximation.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| t | Halving time in years | years | Shorter at higher inflation: about 17.67 years at 4%, 13.86 years at 5%. |
What Each Symbol Means
tyears
Halving time in years
Shorter at higher inflation: about 17.67 years at 4%, 13.86 years at 5%.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate purchasing power page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Purchasing Power, filed under Finance. Every number the guide produces comes from substituting into this one line.