The formula to calculate the cost of long-term care is:
If you know the daily cost:
\[ \text{pc} = \text{dc} \times 365 \]
If you know the monthly cost:
\[ \text{pc} = \text{mc} \times 12 \]
To calculate the inflated cost for each successive year:
\[ \text{ic} = \text{pc} \times (1 + r)^n \]
where:
This calculator helps you determine the total cost of long-term care over a specified number of years, considering the inflation rate. It calculates the cost for each year based on the current daily cost and the expected inflation rate, then sums these costs to give you the total estimated cost.
Let's assume someone wishes to calculate the long-term care cost for a child in the United States for five years:
Step 1: Calculate the cost of care for the first year:
\[ \text{pc} = 50 \times 365 = \$18,250 \]
Step 2: Calculate the inflated cost for each successive year:
\[ \text{ic}_1 = 18,250 \times (1 + 0.03)^1 = \$18,797.50 \]
\[ \text{ic}_2 = 18,250 \times (1 + 0.03)^2 = \$19,361.43 \]
\[ \text{ic}_3 = 18,250 \times (1 + 0.03)^3 = \$19,942.27 \]
\[ \text{ic}_4 = 18,250 \times (1 + 0.03)^4 = \$20,540.54 \]
Step 3: Sum these yearly costs:
\[ 18,250 + 18,797.50 + 19,361.43 + 19,942.27 + 20,540.54 = \$96,891.73 \]
Thus, the estimated total cost of long-term care over 5 years is $96,891.73.
