$1 in 1978 is worth $4.54 today.
The value of $1 from 1978 to 2022
$1 in 1978 has the purchasing power of about $4.54 today, a $3.54 increase in 44 years. Between 1978 and today, the dollar experienced an average annual inflation rate of 3.5%, resulting in a cumulative price increase of 354.41%.
According to the Bureau of Labor Statistics consumer price index, today's prices are several times higher than the average price since 1978.
In 1978, the inflation rate was 7.63%. Inflation is now 8.52% higher than it was last year. If this figure holds true, $1 today will be worth $9.52 next year in purchasing power.
Inflation from 1978 to 2022
| Summary | Value |
|---|---|
| Cumulative price change (from 1978 to today) | 354.41% |
| Average inflation rate (from 1978 to today) | 3.5% |
| Converted amount | $4.54 |
| Price Difference | $3.54 |
| CPI in 1978 | 65.2 |
| CPI in 2022 | 296.276 |
| Inflation in 1978 | 7.63% |
| Inflation in 2022 | 8.52% |
| $1 in 1978 | $4.54 in 2022 |
Buying power of $1 in 1978
If you had $1 in your hand in 1978, its adjusted value for inflation today would be $4.54. Put another way, you would need $4.54 to beat the rising inflation. When $1 becomes equivalent to $4.54 over time, the "real value" of a single US dollar decreases. In other words, a dollar will pay for fewer items at the store.
This effect explains how inflation gradually erodes the value of a dollar. By calculating the value in 1978 dollars, it's evident how $1 loses its worth over 44 years.
Dollar inflation for $1 from 1978 to 2022
The below tabular column shows the effect of inflation on $1 in the year 1978 to the year 1978.
| Year | Dollar Value | Inflation Rate |
|---|---|---|
| 1978 | 1 | 7.63% |
| 1979 | 1.11 | 11.35% |
| 1980 | 1.26 | 13.50% |
| 1981 | 1.39 | 10.32% |
| 1982 | 1.48 | 6.16% |
| 1983 | 1.53 | 3.21% |
| 1984 | 1.59 | 4.32% |
| 1985 | 1.65 | 3.56% |
| 1986 | 1.68 | 1.86% |
| 1987 | 1.74 | 3.65% |
| 1988 | 1.81 | 4.14% |
| 1989 | 1.9 | 4.82% |
| 1990 | 2 | 5.40% |
| 1991 | 2.09 | 4.21% |
| 1992 | 2.15 | 3.01% |
| 1993 | 2.21 | 2.99% |
| 1994 | 2.27 | 2.56% |
| 1995 | 2.34 | 2.83% |
| 1996 | 2.4 | 2.95% |
| 1997 | 2.46 | 2.29% |
| 1998 | 2.5 | 1.56% |
| 1999 | 2.55 | 2.21% |
| 2000 | 2.64 | 3.36% |
| 2001 | 2.71 | 2.85% |
| 2002 | 2.76 | 1.58% |
| 2003 | 2.82 | 2.28% |
| 2004 | 2.9 | 2.66% |
| 2005 | 2.99 | 3.39% |
| 2006 | 3.09 | 3.23% |
| 2007 | 3.18 | 2.85% |
| 2008 | 3.3 | 3.84% |
| 2009 | 3.29 | -0.36% |
| 2010 | 3.34 | 1.64% |
| 2011 | 3.45 | 3.16% |
| 2012 | 3.52 | 2.07% |
| 2013 | 3.57 | 1.46% |
| 2014 | 3.63 | 1.62% |
| 2015 | 3.63 | 0.12% |
| 2016 | 3.68 | 1.26% |
| 2017 | 3.76 | 2.13% |
| 2018 | 3.85 | 2.49% |
| 2019 | 3.92 | 1.76% |
| 2020 | 3.97 | 1.23% |
| 2021 | 4.15 | 4.70% |
| 2022 | 4.55 | 8.52% |
Conversion of 1978 dollars to today's price
Based on the 354.41% change in prices, the following 1978 amounts are shown in today's dollars:
| Initial value | Today value |
|---|---|
| $1 dollar in 1978 | $4.54 dollars today |
| $5 dollars in 1978 | $22.72 dollars today |
| $10 dollars in 1978 | $45.44 dollars today |
| $50 dollars in 1978 | $227.21 dollars today |
| $100 dollars in 1978 | $454.41 dollars today |
| $500 dollars in 1978 | $2272.06 dollars today |
| $1,000 dollars in 1978 | $4544.11 dollars today |
| $5,000 dollars in 1978 | $22720.55 dollars today |
| $10,000 dollars in 1978 | $45441.1 dollars today |
| $50,000 dollars in 1978 | $227205.52 dollars today |
| $100,000 dollars in 1978 | $454411.04 dollars today |
| $500,000 dollars in 1978 | $2272055.21 dollars today |
| $1,000,000 dollars in 1978 | $4544110.43 dollars today |
How to calculate the inflated value of $1 in 1978
To calculate the change in value between 1978 and today, we use the following inflation rate formula:
CPI Today / CPI in 1978 x USD Value in 1978 = Current USD Value
By plugging the values into the formula above, we get:
296.276/ 65.2 x $1 = $4.54
To buy the same product that you could buy for $1 in 1978, you would need $4.54 in 2022.
To calculate the cumulative or total inflation rate in the past 44 years between 1978 and 2022, we use the following formula:
CPI in 2022 - CPI in 1978 / CPI in 1978 x 100 = Cumulative Inflation Rate
By inserting the values to this equation, we get:
( 296.276 - 65.2 / 65.2) x 100 = 354.41%
Alternate method to calculate today's value of money after inflation - Using compound interest formula
Given that money changes over time due to inflation, which acts as compound interest, we can use the following formula:
FV = PV (1+i/100)^n
where,
- FV = Future value
- PV = Present value
- i: Average interest rate (inflation)
- n: Number of times the interest is compounded (i.e. # of years)
The future value in this case represents the amount obtained after applying the inflation rate to our initial value. In other words, it indicates how much $1 is worth today. We have 44 years between 2022 and 1978. The average inflation rate was 3.5003980236966%.
Plugging in the values into the formula, we get:
1 (1+ % 3.5/ 100 ) ^ 44 = $4.54