Edison's project and inflation

Edison has chosen to present his research on the topic "Inflation" for his Social Studies portfolio project which is due on 13 Jul 2012.  

Before the vacation, his classmates and him had handed in their drafts to their Social Studies teacher for comments.  I kept asking Edison about this assignment, but his reply was that he could not continue with the report until he receives feedback from his teacher about his draft.  Finally, after waiting for one whole month, his Social Studies teacher returned their drafts to them yesterday! :)  

Fortunately, his draft was more or less "acceptable" and only needed the inclusion of artifacts to support his statements besides other minor changes.  

As there is only one week left to complete this assignment, he quickly tried to look for artifacts this evening that he can include in the report. 

We thought of ways to help him such as looking for old receipts of our purchases to show the increase in prices over the years that reflect inflation, but unfortunately, our 'brilliant' idea did not come to fruit since most people don't really keep receipts from 1980s and neither did we. 

Well, a better idea was to Google.  And so this is what he did, and NRZ chipped in to find some resources for him too. 

Sadly, his Daddy and Mummy are totally noobs at economics.  We did not even know how inflation rate is computed!  After reading some of the notes at the links below, I think I have a better understanding.

http://www.singstat.gov.sg/stats/themes/economy/prices.html
http://www.tradingeconomics.com/singapore/inflation-cpi
http://www.mas.gov.sg/Monetary-Policy-and-Economics/Education-and-Research/Education/Inflation-Video.aspx
http://wiki.answers.com/Q/How_inflation_rate_is_calculated
http://www.rateinflation.com/inflation-information/calculate-inflation.php

Explaination taken from this site

The formula for calculating the Inflation Rate looks like this:

 ((CPI_Today - CPI_LastYear)/CPI_LastYear)*100

So if exactly one year ago the Consumer Price Index was 178 and today the CPI is 185, then the calculations would look like this:

((185-178)/178)*100
or
 (7/178)*100
or
 0.0393*100 

which equals 3.93% inflation over the sample year.