If something is worth $1,000 today, and it has been increasing at a fixed 7.5% per year for the past 10 years, how do I calculate what it was worth 10 years ago? I"ve tried several functions, searched Help and this forum, but I can’t find the answer. I hope it’s not something embarrassingly simple…
When something had a cost of X, and had increased by 7.5% a year, then by the end of one year, it will cost X*1.075. Each next year it will multiply the previous year’s cost by 1.075 (after two years, it will cost X*1.075*1.075 = X*(1.075^2)). So in 10 years, it will cost X*(1.075^10). So, to find X, you simply need to divide the final cost by 1.075 raised to power N (where N is number of years): 1000/(1.075^10).
I don’t think that it’s something which help needs to address… it’s rather elementary math (and help isn’t an elementary math handbook).
Mike - As I feared, the answer is embarrassingly simple. I was looking for a function. But I don’t recall this kind of problem in my elementary math classes - dividing by a percentage multiplied by an exponent. I barely made it through algebra decades ago, and I never took calculus. Sorry if my ignorance offended you.
It didn’t (and mustn’t) offend me - I only tried to discuss the part of the question about why isn’t it in help, so I tried to give an explanation; and also I did it in comment - opposed to in the main answer - to not sound rude. Sorry if I still was - English isn’t my native language.
Thanks. NP re: the language barrier. Try telling a Russian joke in English, or vice-versa. Mathematicians can calculate things with a simple formula, or in their heads. But we “mortals” cannot. We need functions, or a “higher math” lesson like yours. (FYI: In the USA, “elementary” can mean grade 1-5, age 6-10.)
In the USA, “elementary” can mean grade 1-5, age 6-10
Oh - so I see my mistake; sorry for that. And thanks for the lesson - it’s good to improve my language skills!
If you were from the USA or the UK, I would say your calling it “elementary math” was “snotty” (annoyingly or spitefully unpleasant). But of course, you did not intend it that way. No apology necessary.