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Calculating real return in last year dollars | Inflation | Finance & Capital Markets | Khan Academy

Video vocabulary

about

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US / ə'baʊt /

UK / əˈbaʊt /

A1
  • adverb
  • To be ready to; going to
  • Nearly; approximately; roughly
  • Near; next to; close to
  • In every direction; in the area of
  • preposition
  • Concerning or of (a topic)

then

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US / ðen /

UK / ðɛn /

A1
  • adverb
  • A time that is not now
  • Following another thing in time or arrangement
  • Following on reasonably from what was just stated
  • At that time, not now

get

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US / ɡet /

UK / ɡɛt /

A1
  • verb
  • To become affected by illness or disease
  • To begin to feel or understand an emotion or idea
  • To send or bring someone or something home, etc.
  • To go somewhere to obtain something
  • To (cause to) do a particular thing
  • To obtain, receive or be given something
  • To currently have
  • To prepare for use
  • To understand something being said or read

what

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US / wɒt /

UK / hwɑt, hwʌt, wɔt, wʌt,hwət, wət /

A1
  • pronoun
  • Thing or things that; the same kind as
  • Used to emphasize something you are about to say
  • adjecitve
  • Used to refer to a particular amount, or number
  • Used to place emphasis on a particular quality
  • adverb
  • To a certain degree
  • determiner
  • Question words used for asking for information
  • exclamation
  • Used to express excitement, shock, or surprise
  • Used to ask people to repeat something they said

right

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US / raɪt /

UK / raɪt /

A1
  • adjecitve
  • Correct or true
  • The south side of you looking at the rising sun
  • adverb
  • Exactly in a place or time
  • Being appropriate for a particular event
  • In a straight or direct manner
  • noun
  • Something you are legally or morally allowed to do
  • Ideal of what is just and good
  • Political view based on conservatism
  • verb
  • To fix something previously wrong or unjust
  • To make upright, as a boat that has turned over

roughly

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US / ˈrʌfli /

UK / ˈrʌflɪ /

B1
  • adverb
  • Approximately; (of numbers) about; around
  • In a manner that is violent or not careful
  • In an inexact, imprecise or violent way
  • In a basic, simple manner

even

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US / 'i:vn /

UK / ˈivən /

A1
  • adjecitve
  • Being equal in influence, power, possibility etc.
  • Being divided equally or fairly
  • (Of teams/contest) with similar chances of success
  • Smooth, level, or regular
  • Can be divided by 2; ending in 2, 4, 6, 8, or 0
  • At a regular, equally steady manner
  • Remaining steady and unchanging
  • adverb
  • (When this is surprising) as well; too
  • (Used to compare two things/stress the difference)
  • verb
  • To make something level; to flatten
  • To make something equal

solve

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US / sɒlv /

UK / sɑ:lv /

A2
  • verb
  • To figure out a way to handle a difficult problem

index

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US / ˈɪndeks /

UK / ˈɪnˌdɛks /

A2
  • noun
  • Number showing how prices, wages changed over time
  • Written or printed (usually alphabetical) list
  • verb
  • To adjust a value/wages as other things change
  • To make a list of things in alphabetical order

again

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US / ə'ɡen /

UK / əˈɡɛn /

A1
  • adverb
  • One more time, once more

algebra

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US / ˈældʒɪbrə /

UK / ˈældʒəbrə /

C1
  • noun
  • Math using letters or symbols in place of numbers

that

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US / ðæt /

UK / ðæt, ðət /

A1
  • adjecitve
  • The person or thing being talked about
  • Used to identify something both the speakers know
  • adverb
  • Used to reinforce adjectives and adverbs
  • To such a degree
  • conjunction
  • Used to connect a noun clause
  • Used to introduce an adverbial clause
  • Used to introduce a noun clause
  • determiner
  • Used as a noun to refer to something
  • pronoun
  • Referring an object far away
  • Used to refer to the relative pronoun ‘which’

move

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US / mu:v /

UK / muv /

A1
  • noun
  • Act of moving a playing piece in chess, etc.
  • An action; doing something
  • Step taken to achieve a goal
  • verb
  • To cause someone to have certain emotions
  • To cause something to change to a different place
  • To change where people live or a business operates
  • To take action to do or achieve something

believe

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US / bɪ'li:v /

UK / bɪˈliv /

A1
  • verb
  • To think or accept that something is true
  • To have a particular opinion about something

bit

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US / bɪt /

UK / bɪt /

A1
  • noun
  • Device put in a horse's mouth to control it
  • Small piece of something
  • verb
  • (E.g. of fish) to take bait and be caught

ago

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US / əˈgəʊ /

UK / əˈgoʊ /

A1
  • adverb
  • At a specified length of time in the past

both

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US / bəuθ /

UK / boθ /

A1
  • determiner
  • Used to refer to two things at the same time
  • pronoun
  • Used to refer to two things at the same time

add

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US / æd /

UK / æd /

A1
  • verb
  • To include as well
  • To put two things or numbers together, e.g. 2+2

return

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US / rɪ'tɜ:n /

UK / rɪ'tɜ:rn /

A1
  • adjecitve
  • Do again; repeated
  • noun
  • Faulty or unwanted product sent back to a company
  • Enter key; the main key on the computer keyboard
  • Profit made as a result of a business activity
  • Process of going back to a previous way or state
  • verb
  • To hit something back to the other player or team
  • To come back after being away from somewhere
  • To repay someone's actions, kindness etc.
  • To put, bring, take, give, or send something back
  • To occur again

figure

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US / ˈfiɡə /

UK / ˈfɪɡjɚ /

A1
  • noun
  • Your body shape
  • Numbers in a calculation
  • Doll-like thing meant to represent a person
  • Picture or diagram giving information in a text
  • Person who is very important or famous
  • Shape of a person seen indistinctly or in outline
  • Amount that is expressed in numbers
  • verb
  • To appear in a game, play or event
  • To calculate how much something will cost
  • To understand after thinking; work out

male

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US / meɪl /

UK / ˈmel /

A2
  • adjecitve
  • Characteristic of boys or men
  • noun
  • A member of the sex that fertilizes eggs

multiply

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US / ˈmʌltɪplaɪ /

UK / ˈmʌltəˌplaɪ /

B1
  • verb
  • To increase in number by reproducing/having babies
  • To increase something by a large quantity
  • To have increased by a large quantity
  • To calculate two numbers e.g. 2 x 4

pretty

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US / 'prɪtɪ /

UK / ˈprɪti /

A1
  • adjecitve
  • Being attractive to the eye in a simple way
  • adverb
  • Very; to a great degree

way

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US / weɪ /

UK / we /

A1
  • adverb
  • Used to emphasize the amount of something
  • noun
  • Particular aspect of something being thought about
  • One of various choices that could be made
  • Particular existing condition or state
  • (Often long) distance or length of time
  • How something is done
  • Route to go to a place
  • Small street
  • Usual behavior, emotions or habits of someone

dollar

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US / ˈdɒlə(r) /

UK / ˈdɑ:lə(r) /

A1
  • noun
  • A basic unit of money equal to 100 cent

digit

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US / ˈdɪdʒɪt /

UK / ˈdɪdʒɪt /

B2
  • noun
  • Person's finger or toe
  • Written symbol of the numbers from 0 to 9

everything

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US / 'evrɪθɪŋ /

UK / ˈɛvriˌθɪŋ /

A1
  • pronoun
  • All of the things mentioned

increase

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US / ɪn'kri:s /

UK / ɪnˈkris /

A1
  • noun
  • Fact of increasing; amount something grows by
  • verb
  • To make or become larger in size or amount

calculate

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US / 'kælkjʊleɪt /

UK / ˈkælkjəˌlet /

B2
  • verb
  • To find an answer using mathematics
  • To make an educated guess about something

end

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US / end /

UK / ɛnd /

A1
  • noun
  • The point where a process or activity stops
  • A point that marks the limit of something; finish
  • Goal or desired result
  • The tip, edge or limit of something
  • verb
  • To be the last part of something

last

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US / lɑ:st /

UK / læst /

A1
  • adjecitve
  • Most recent; the latest
  • The one before
  • adverb
  • Final; with nothing following; after all others
  • Most recent; the latest
  • determiner
  • The one at the end
  • verb
  • To remain or continue for a certain period of time

with

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US / wɪð /

UK / wɪð, wɪθ /

A1
  • preposition
  • As an employee of a certain company
  • Against something or someone
  • By using something as a means
  • Due to; because of
  • Including
  • Possessing as a feature
  • Related to
  • (Of the manner/attitude by which you do something)
  • Used to express that people or things are together

could

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US / kəd /

UK / kʊd /

A1
  • other
  • Past form of 'can' to mean have ability
  • Used to ask for something politely, or to offer

have

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US / həv /

UK / hæv /

A1
  • verb
  • To drink, smoke, eat or use something
  • To experience the effects of something
  • To organize an event, or join in an activity
  • To own, possess, or hold something
  • To cause to happen or produce a particular effect

round

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US / raʊnd /

UK / raʊnd /

A1
  • adjecitve
  • Being in the shape of a circle or ball
  • Consisting of curved and not straight lines
  • Somewhat fat or curved in physical appearance
  • Being a whole number, not a fraction, decimal
  • adverb
  • From beginning to end (e.g. of the year)
  • noun
  • One of the three-minute periods in boxing
  • Drinks bought by one person for a group
  • Series regular visits, routes, or stops at places
  • Single shot or bullet fired from a gun
  • An object with a circular shape
  • One stage in a series of games, e.g. football
  • One's turn in a game such as cards
  • preposition
  • Going around
  • verb
  • To cause or make a circular or curved shape
  • To go or pass around the bend or corner
  • To change from a fraction to nearest whole number

same

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US / seɪm /

UK / sem /

A1
  • adjecitve
  • Being equal in quality and amount
  • Identical; not different
  • Not changing; constant

video

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US / 'vɪdɪəʊ /

UK / ˈvɪdiˌo /

A2
  • adjecitve
  • Of a moving film, with sound
  • noun
  • Recording capturing action with sound
  • verb
  • To make a moving film of, with sound

not

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US / nɒt /

UK / nɑt /

A1
  • adverb
  • Word indicating the negative
  • (Used to form the negative of verbs)

would

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US / wʊd /

UK / wʊd /

A1
  • other
  • Used to indicate something imagined
  • Used to ask or request something politely
  • Verb used to indicate possibility, request etc.
  • Used to indicate a preference
  • Used to indicate a reaction
  • Indicates something that occurred repeatedly
  • Used to indicate willingness or ability to do

can

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US / kæn /

UK / kən,kæn /

A1
  • noun
  • A metal container for storing food
  • other
  • Able to; have the skill to; have the time to
  • verb
  • To have permission to
  • To be possible to do
  • To preserve food by sealing it in a metal container

equal

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US / 'i:kwəl /

UK / ˈikwəl /

A1
  • adjecitve
  • Same in shape, size, or number
  • verb
  • To add up or be the same as

our

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US / 'aʊə(r) /

UK / aʊr /

A1
  • determiner
  • Belonging to us

but

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US / bət /

UK / bʌt,bət /

A1
  • conjunction
  • Used before you say something different, opposite

want

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US / wɔnt /

UK / wɑnt, wɔnt /

A1
  • noun
  • Something you desire or wish for
  • State or condition of poverty
  • verb
  • To desire or wish for something; hope for a thing

cent

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US / sent /

UK / sɛnt /

A2
  • noun
  • 100th of the basic unit of money e.g. a dollar

maybe

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US / ˈmeɪbi /

UK / ˈmebi /

A1
  • adverb
  • Possibly but not certainly; perhaps

whole

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US / həul /

UK / hol /

A1
  • adjecitve
  • Complete or full; all of
  • Being in a good condition
  • noun
  • Complete amount or sum; total

and

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US / ənd /

UK / ənd, ən,ænd /

A1
  • conjunction
  • Used to refer to two or more things
  • Plus; in addition; on top of that
  • Used to introduce an action that follows another

over

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US / 'əʊvə(r) /

UK / ˈovɚ /

A1
  • adverb
  • Finished; no longer happening
  • Towards the ground/away from a standing position
  • noun
  • A set of six consecutive balls bowled in cricket
  • other
  • Finished
  • preposition
  • Showing the relation when a thing is above another
  • On or covering something
  • Above or across something
  • More than you need
  • From one side to the other
  • In the direction of; toward

another

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US / əˈnʌðə(r) /

UK / əˈnʌðɚ /

A1
  • adjecitve
  • One more, but not this
  • determiner
  • One more added
  • pronoun
  • One more (thing)

out

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US / aʊt /

UK / aʊt /

A1
  • adverb
  • No longer stylish (e.g. fashion)
  • Away from home, business, or the usual place
  • In a direction/movement away from inside or center
  • noun
  • Act when a batter cannot continue playing
  • verb
  • To tell people a secret

put

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US / pʊt /

UK / pʊt /

A1
  • phrasal verb
  • to make a light stop shining by pressing or moving a switch
  • verb
  • To move or place a thing in a particular position
  • To rate something in importance or value
  • To write or say something in a certain manner

think

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US / θɪŋk /

UK / θɪŋk /

A1
  • verb
  • To have an idea about something without certainty
  • To have an idea, opinion or belief about something

call

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US / kɔ:l /

UK / kɔl /

A1
  • noun
  • A order or request for action
  • The sound an animal makes, often when in danger
  • A correct prediction, e.g. a decision in a game
  • A short visit to a place or person
  • A decision by a referee or umpire in a game
  • verb
  • To make a request or order for action
  • (Animal) to make sounds to warn of danger
  • To announce the date of an election
  • To make a judgment about something
  • To give someone or something a name
  • To guess in advance the result or outcome
  • To visit a place or person for a short time
  • To phone someone
  • To speak, announce or shout in a loud voice

money

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US / 'mʌnɪ /

UK / ˈmʌni /

A1
  • noun
  • Coins or notes we use to pay for things

real

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US / rɪəl /

UK / ˈriəl, ril /

A1
  • adjecitve
  • Actually existing or happening, not imagined
  • Being important or special

divide

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US / dɪ'vaɪd /

UK / dɪˈvaɪd /

A2
  • verb
  • To split numbers by another number, e.g. 6 / 2 = 3
  • To separate something into equal pieces

inflation

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US / ɪn'fleɪʃn /

UK / ɪnˈfleʃən /

B1
  • noun
  • Act of filling something with air or gas
  • Continual rise in the prices of products

intuitive

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US / ɪnˈtju:ɪtɪv /

UK / ɪnˈtuɪtɪv, -ˈtju- /

B2
  • adjecitve
  • Able to understand by feeling rather than fact

actually

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US / ˈæktʃuəli /

UK / ˈæktʃuəli /

A1
  • adverb
  • Used to add new (often different) information

side

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US / saɪd /

UK / saɪd /

A1
  • adjecitve
  • In addition to the central or most important thing
  • Next to, or very close to, the right or left of
  • noun
  • Position or opinion that is opposite to another
  • Right or left part of a person's body
  • Feature of someone's personality
  • Straight edge of an object
  • One of two or more groups fighting each other
  • verb
  • To decide to agree with one point, not the other

once

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US / wʌns /

UK / wʌns /

A1
  • adverb
  • One time; one instance
  • At a time in the past
  • conjunction
  • When; as soon as

worth

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US / wɜ:θ /

UK / wɚθ /

A2
  • other
  • the financial, practical or moral value of somebody/something
  • having a particular value, especially in money

amount

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US / ə'maʊnt /

UK / əˈmaʊnt /

A1
  • noun
  • Quantity of something
  • verb
  • To add up to a certain figure

much

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US / mʌtʃ /

UK / mʌtʃ /

A1
  • adjecitve
  • Very; to a high level or degree
  • adverb
  • A lot; large amount; a high degree of
  • Nearly; basically
  • On many occasions; often
  • noun
  • A large amount; a great quantity

just

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US / dʒʌst /

UK / dʒʌst /

A1
  • adjecitve
  • Proper or appropriate; as is deserved
  • Doing or being what is right or fair
  • Legally correct; having enough evidence
  • adverb
  • Almost; nearly
  • Exactly at the time of
  • Exactly (the same as, like)

grow

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US / ɡrəʊ /

UK / ɡro /

A1
  • verb
  • To get bigger and more mature; make plants do this
  • To improve; to develop better skills over time
  • To develop and become bigger or taller over time

purchase

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US / ˈpɜːtʃəs /

UK / ˈpɜːrtʃəs /

A2
  • noun
  • Something that you bought
  • Strong hold on something; grip
  • verb
  • To buy something; to get by paying money for it

exact

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US / ɪɡ'zækt /

UK / ɪɡˈzækt /

A2
  • adjecitve
  • Completely correct; accurate; specific
  • verb
  • To get something, sometimes using force

for

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US / fə(r) /

UK / fɔr,fə /

A1
  • preposition
  • Used to show the purpose, or need of something

well

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US / wel /

UK / wɛl /

A1
  • adjecitve
  • Being in a fortunate, good condition or state
  • Healthy and in good condition
  • adverb
  • In an acceptable, proper, or successful manner
  • In a complete, total, or full manner
  • A great and considerable degree
  • In a successful way, in a good or satisfactory way
  • exclamation
  • Used to begin or continue a particular statement
  • Used to show you want to start saying something
  • Used to express that you are waiting for a reply
  • You say this to change the topic of a conversation
  • Used to indicate you are making a final remark
  • noun
  • Long deep hole in the ground to get water
  • verb
  • To cause your eyes to fill with tears

investment

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US / ɪnˈvestmənt /

UK / ɪnˈvɛstmənt /

A2
  • noun
  • Something purchased hoping its value will increase
  • Act of giving time, energy to see a future reward

rate

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US / reɪt /

UK / ret /

A1
  • noun
  • Current price or cost of something
  • Speed or frequency of events over time
  • verb
  • To assess something or consider its qualities

able

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US / 'eɪbl /

UK / ˈebəl /

A2
  • adjecitve
  • Skilled; good at something
  • Having the ability to do something

this

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US / ðɪs /

UK / ðɪs /

A1
  • adjecitve
  • Used to indicate something already been discussed
  • Used to indicate something happening around now
  • adverb
  • An indication by a physical motion or gesture
  • A specific amount of
  • determiner
  • Person, thing, or idea near you
  • pronoun
  • Person, thing that has already been discussed

how

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US / haʊ /

UK / haʊ /

A1
  • adjecitve
  • To what degree? in what amount?
  • adverb
  • (Used to explain the way to do something)
  • exclamation
  • For what purpose or reason?
  • (Used to ask someone or something's condition)

you

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US / jʊ /

UK / ju /

A1
  • pronoun
  • Person someone is speaking or writing to
  • Person or people in general

little

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US / 'lɪtl /

UK / ˈlɪtl /

A1
  • adjecitve
  • Being short in length of time
  • Not great in size, amount, or degree; small
  • Being very young or younger than others
  • adverb
  • By an amount or degree that is not very much
  • Not often; rarely
  • noun
  • A person's name

make

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US / meɪk /

UK / mek /

A1
  • noun
  • Product made by a particular company; brand
  • verb
  • To arrange or prepare something e.g. dinner
  • To get to (a place) on time
  • To gain the status of (teacher, lawyer, etc.)
  • To create something by putting things together
  • To earn a certain amount of money at a job
  • To cause or force a person to do something
  • To cause something to happen or be formed

let

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US / let /

UK / lɛt /

A1
  • verb
  • To allow someone to do something
  • Introducing a suggestion to do something together
  • To rent a house, etc. to others

power

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US / 'paʊə(r) /

UK / ˈpaʊɚ /

A1
  • noun
  • Legal or official right to perform certain actions
  • Ability to move forcefully and quickly
  • Energy of something (e.g. electricity or fuel)
  • Mathematical way to multiply a number
  • Condition of being in political control
  • Physical force, energy, and strength
  • verb
  • To give energy to something, e.g. by electricity
  • To move something forcefully and quickly

the

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US / ðə /

UK / ðə /

A1
  • article
  • Used to refer to something already mentioned
  • Used to show there is only one of something
  • determiner
  • Used to describe all of a family

originally

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US / əˈrɪdʒənəli /

UK / əˈrɪdʒənəli /

A2
  • adverb
  • At first; in the beginning
  • In a new and unique manner

year

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US / jə: /

UK / jɪr /

A1
  • noun
  • Unit of time equal to 12 months or 365 or 366 days
  • Used to refer to the age of a person
  • Subtitles section
  • Male voice: In the last video, we were able to calculate the real return by putting everything in today's dollars. Put that $100 we invested a year ago in today's dollars, figure out what our actual return was, our dollar return is in today dollars, then we got our real return.
  • What I want to think about in this video is how we can do it another way.
  • We can actually put everything in last year's money. We got $110. Let's put $110, of today's money in last year's money.
  • To think about this, we could do a little algebra, or you don't have to do algebra, but maybe that makes it a little bit more intuitive.
  • There's some amount of money last year, there's some amount of money, let's call that X, that if we multiply it by the inflation rate, so if we grow it by 2%, that's going to be worth $110 today.
  • Or, to just solve for X, you divide both sides by 1.02 and we get the amount of money that if you grow it by inflation, or that had the same amount of purchasing power as $110 today, would be 110 divided by 1.02 which is,
  • let me move over to the right at little bit, this would be 110 divided by 1.02.
  • This would be equal to $107.8 just roughly, just to round it. This is equal to $107.8.
  • So $110 today buys us the exact same thing, if you believe the whole CPI Index, as $107.80, maybe I can even add another digit, 84 cents, would have bought us last year.
  • What is our dollar return in last year's money?
  • Dollar return in last year's money.
  • Last year's money.
  • Well, we ended up with $107.84 in last year's money.
  • So 107.84, or $107.84. We had originally invested, in last year's money, $100.
  • We had originally invested $100.
  • So our dollar return is $7.84, or if you want to calculate the real return, how much did our actual purchasing power increase?
  • Well, we got a $7.84 return off of a $100 investment, so this is pretty easy to calculate.
  • We once again get to the same 7.8% for the real return.