1. What is the Cost Increase Calculator?

The Cost Increase Calculator helps project future costs based on current costs and an expected rate of increase over a specified number of periods. It's useful for budgeting, financial planning, and cost analysis.

2. How Does the Calculator Work?

The calculator uses the compound growth formula:

Where:

• Old Cost — Current cost amount
• Rate — Percentage increase per period
• Periods — Number of time periods

Explanation: The formula accounts for compound growth, where each period's increase is applied to the previous period's total (including previous increases).

3. Importance of Cost Projection

Details: Accurate cost projection is crucial for financial planning, budgeting, investment decisions, and understanding the long-term impact of inflation or price increases.

4. Using the Calculator

Tips: Enter the current cost (positive number), rate of increase (percentage), and number of periods (whole number). All values must be valid (cost > 0, rate ≥ 0, periods ≥ 1).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between simple and compound increase?
A: Simple increase adds the same amount each period, while compound increase applies the rate to the growing total each period.

Q2: Can this calculator be used for decreases?
A: Yes, simply enter a negative rate to calculate cost decreases over time.

Q3: What time periods can I use?
A: The calculator works for any time period (years, months, etc.) as long as the rate matches the period length.

Q4: How accurate are these projections?
A: They're mathematically accurate for the given inputs, but actual results depend on whether the rate remains constant.

Q5: Can I calculate monthly increases from an annual rate?
A: You would need to convert the annual rate to a monthly equivalent rate first.