# Convention / standard methodology for calculating real prices?

Is there an established professional standard used by economic / financial institutions for including or excluding i) the starting year/period, and ii) the end year/period when calculating real prices (i.e. when multiplying nominal values by a multiplier)?

Theoretically, there are four (mutually exclusive) possibilities

1. Include start period inflation, include end year inflation
2. Include start period inflation, exclude end year inflation
3. Exclude start period inflation, include end year inflation
4. Exclude start period inflation, exclude end year inflation

### Example

Converting $100 from 2008 into 2010 dollars. Suppose inflation was 2% in 2008, 3% in 2009, and 4% in 2010. Applying the four methods gives four answers, like so Method 1 Multiplying by the inflation in all of 2008, 2009, and 2010 (i.e. including start year and end year) $100 * (1 + 0.02) * (1 + 0.03) * (1 + 0.04) = 109.26


Method 2

Multiplying by the inflation in all of 2008 and 2009 (not including end year)

$100 * (1 + 0.02) * (1 + 0.03) = 105.06  Method 3 Multiplying the 2008 price by the inflation in 2009 and 2010 (not including start year) $100 * (1 + 0.03) * (1 + 0.04) = 107.12


Method 4

Multiplying by only the years in between (i.e. not including the start year nor end year) i.e.