# Cost of living adjustment

=base+(base*cola)

To calculate a cost of living (COLA) adjustment in Excel, you can use a simple formula that multiplies the base times the adjustment percentage, then adds the result to the base. In the example shown, the formula in C6, copied down, is:

=C5+(C5*cola)

where **cola** is the named range F6, and contains the adjustment as a percentage.

The goal in this example is to calculate a cost of living (COLA) adjustment for each of the eleven years shown, starting on the second year. The actual adjustment percentage is entered in cell F6, which is the named range **cola**. Each year, the adjustment should be applied to the previous base amount in column C, starting with the base amount in cell C5.

The formula in cell C6, copied down is:

=C5+(C5*cola)

With 30,000 in C5 as shown, the formula is solved like this:

=C5+(C5*cola) =30000+(30000*0.03) =30000+900 =30900

As the formula is copied down the table, the relative reference C5 changes at each row, while the named range **cola** (F6) behaves like an absolute reference and does not change. The result on each new row is the previous year's base plus the adjustment.

### Total adjustments

To calculate the total of all adjustments, the formula in F7 is:

=SUM(C5:C15-C5)

This is an array formula, and must be entered with control+shift+enter, except in Excel 365. The result is the total of all adjustments made since year 1.

### Alternative layout

The screen below shows an alternative layout that breaks out the adjustment amount separately, and allows a different rate of adjustment for each year.

The formula in N5, copied down, calculates the adjustment:

=M5*L5

The formula in M6, copied down, calculates a new base for year:

=M5+N5

## Excel Formula Training

Formulas are the key to getting things done in Excel. In this accelerated training, you'll learn how to use formulas to manipulate text, work with dates and times, lookup values with VLOOKUP and INDEX & MATCH, count and sum with criteria, dynamically rank values, and create dynamic ranges. You'll also learn how to troubleshoot, trace errors, and fix problems. Instant access. See details here.

## Download 100+ Important Excel Functions

Get over 100 Excel Functions you should know in one handy PDF.