$5 in 1979 is worth $20.4 today.
The value of $5 from 1979 to 2022
$5 in 1979 has the purchasing power of about $20.4 today, a $15.4 increase in 43 years. Between 1979 and today, the dollar experienced an average annual inflation rate of 3.32%, resulting in a cumulative price increase of 308.09%.
According to the Bureau of Labor Statistics consumer price index, today's prices are several times higher than the average price since 1979.
In 1979, the inflation rate was 11.25%. Inflation is now 8.52% higher than it was last year. If this figure holds true, $5 today will be worth $47.6 next year in purchasing power.
Inflation from 1979 to 2022
| Summary | Value |
|---|---|
| Cumulative price change (from 1979 to today) | 308.09% |
| Average inflation rate (from 1979 to today) | 3.32% |
| Converted amount | $20.4 |
| Price Difference | $15.4 |
| CPI in 1979 | 72.6 |
| CPI in 2022 | 296.276 |
| Inflation in 1979 | 11.25% |
| Inflation in 2022 | 8.52% |
| $5 in 1979 | $20.4 in 2022 |
Buying power of $5 in 1979
If you had $5 in your hand in 1979, its adjusted value for inflation today would be $20.4. Put another way, you would need $20.4 to beat the rising inflation. When $5 becomes equivalent to $20.4 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 1979 dollars, it's evident how $5 loses its worth over 43 years.
Dollar inflation for $5 from 1979 to 2022
The below tabular column shows the effect of inflation on $5 in the year 1979 to the year 1979.
| Year | Dollar Value | Inflation Rate |
|---|---|---|
| 1979 | 5 | 11.25% |
| 1980 | 6.32 | 13.50% |
| 1981 | 6.97 | 10.32% |
| 1982 | 7.4 | 6.16% |
| 1983 | 7.63 | 3.21% |
| 1984 | 7.96 | 4.32% |
| 1985 | 8.24 | 3.56% |
| 1986 | 8.4 | 1.86% |
| 1987 | 8.71 | 3.65% |
| 1988 | 9.06 | 4.14% |
| 1989 | 9.5 | 4.82% |
| 1990 | 10.01 | 5.40% |
| 1991 | 10.44 | 4.21% |
| 1992 | 10.75 | 3.01% |
| 1993 | 11.07 | 2.99% |
| 1994 | 11.36 | 2.56% |
| 1995 | 11.68 | 2.83% |
| 1996 | 12.02 | 2.95% |
| 1997 | 12.3 | 2.29% |
| 1998 | 12.49 | 1.56% |
| 1999 | 12.77 | 2.21% |
| 2000 | 13.2 | 3.36% |
| 2001 | 13.57 | 2.85% |
| 2002 | 13.79 | 1.58% |
| 2003 | 14.1 | 2.28% |
| 2004 | 14.48 | 2.66% |
| 2005 | 14.97 | 3.39% |
| 2006 | 15.45 | 3.23% |
| 2007 | 15.89 | 2.85% |
| 2008 | 16.5 | 3.84% |
| 2009 | 16.44 | -0.36% |
| 2010 | 16.71 | 1.64% |
| 2011 | 17.24 | 3.16% |
| 2012 | 17.6 | 2.07% |
| 2013 | 17.86 | 1.46% |
| 2014 | 18.15 | 1.62% |
| 2015 | 18.17 | 0.12% |
| 2016 | 18.4 | 1.26% |
| 2017 | 18.79 | 2.13% |
| 2018 | 19.25 | 2.49% |
| 2019 | 19.6 | 1.76% |
| 2020 | 19.84 | 1.23% |
| 2021 | 20.77 | 4.70% |
| 2022 | 22.73 | 8.52% |
Conversion of 1979 dollars to today's price
Based on the 308.09% change in prices, the following 1979 amounts are shown in today's dollars:
| Initial value | Today value |
|---|---|
| $1 dollar in 1979 | $4.08 dollars today |
| $5 dollars in 1979 | $20.4 dollars today |
| $10 dollars in 1979 | $40.81 dollars today |
| $50 dollars in 1979 | $204.05 dollars today |
| $100 dollars in 1979 | $408.09 dollars today |
| $500 dollars in 1979 | $2040.47 dollars today |
| $1,000 dollars in 1979 | $4080.94 dollars today |
| $5,000 dollars in 1979 | $20404.68 dollars today |
| $10,000 dollars in 1979 | $40809.37 dollars today |
| $50,000 dollars in 1979 | $204046.83 dollars today |
| $100,000 dollars in 1979 | $408093.66 dollars today |
| $500,000 dollars in 1979 | $2040468.32 dollars today |
| $1,000,000 dollars in 1979 | $4080936.64 dollars today |
How to calculate the inflated value of $5 in 1979
To calculate the change in value between 1979 and today, we use the following inflation rate formula:
CPI Today / CPI in 1979 x USD Value in 1979 = Current USD Value
By plugging the values into the formula above, we get:
296.276/ 72.6 x $5 = $20.4
To buy the same product that you could buy for $5 in 1979, you would need $20.4 in 2022.
To calculate the cumulative or total inflation rate in the past 43 years between 1979 and 2022, we use the following formula:
CPI in 2022 - CPI in 1979 / CPI in 1979 x 100 = Cumulative Inflation Rate
By inserting the values to this equation, we get:
( 296.276 - 72.6 / 72.6) x 100 = 308.09%
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 $5 is worth today. We have 43 years between 2022 and 1979. The average inflation rate was 3.324596386578%.
Plugging in the values into the formula, we get:
5 (1+ % 3.32/ 100 ) ^ 43 = $20.4