# Inflation rate The **Inflation Rate** setting defines the annual percentage increase applied to future expenses in your maintenance plan. It helps you account for the rising cost of materials, labour, and services over time — ensuring your forecasts remain realistic and accurate. --- ## How it works When an expense recurs periodically (for example, every 2, 5, or 10 years), its cost increases by the inflation rate for each year that passes between occurrences. **Example:** - Current cost: **$1,000** - Next due: **2025** - Frequency: **Every 2 years** - Inflation rate: **1%**

Year	Calculation	Adjusted Cost
2025	Base year	$1,000.00
2027	$1,000 × (1.01)²	$1,020.10
2029	$1,000 × (1.01)⁴	$1,040.60
2031	$1,000 × (1.01)⁶	$1,061.52
...	and so on	...

Each new occurrence uses **compound inflation**, meaning the increase applies cumulatively over time. --- ## Updating the inflation rate You can update the inflation rate at any time. However, changes only affect **future values** — any amounts already approved or recorded for past years remain unchanged. This allows you to adjust your plan annually (or whenever needed) to better reflect real-world economic conditions. --- ## Summary - The inflation rate increases **future** expenses based on the number of years until they occur. - Updates apply **only going forward** — past approved values remain fixed. - Adjusting the rate periodically helps keep your plan **accurate and realistic** over time.