$500 in 1980 is worth $1797.79 today.
The value of $500 from 1980 to 2022
$500 in 1980 has the purchasing power of about $1797.79 today, a $1297.79 increase in 42 years. Between 1980 and today, the dollar experienced an average annual inflation rate of 3.09%, resulting in a cumulative price increase of 259.56%.
According to the Bureau of Labor Statistics consumer price index, today's prices are several times higher than the average price since 1980.
In 1980, the inflation rate was 13.55%. Inflation is now 8.52% higher than it was last year. If this figure holds true, $500 today will be worth $4760 next year in purchasing power.
Inflation from 1980 to 2022
| Summary | Value |
|---|---|
| Cumulative price change (from 1980 to today) | 259.56% |
| Average inflation rate (from 1980 to today) | 3.09% |
| Converted amount | $1797.79 |
| Price Difference | $1297.79 |
| CPI in 1980 | 82.4 |
| CPI in 2022 | 296.276 |
| Inflation in 1980 | 13.55% |
| Inflation in 2022 | 8.52% |
| $500 in 1980 | $1797.79 in 2022 |
Buying power of $500 in 1980
If you had $500 in your hand in 1980, its adjusted value for inflation today would be $1797.79. Put another way, you would need $1797.79 to beat the rising inflation. When $500 becomes equivalent to $1797.79 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 1980 dollars, it's evident how $500 loses its worth over 42 years.
Dollar inflation for $500 from 1980 to 2022
The below tabular column shows the effect of inflation on $500 in the year 1980 to the year 1980.
| Year | Dollar Value | Inflation Rate |
|---|---|---|
| 1980 | 500 | 13.55% |
| 1981 | 556.27 | 10.32% |
| 1982 | 590.38 | 6.16% |
| 1983 | 609.35 | 3.21% |
| 1984 | 635.55 | 4.32% |
| 1985 | 658.08 | 3.56% |
| 1986 | 670.58 | 1.86% |
| 1987 | 695.15 | 3.65% |
| 1988 | 723.5 | 4.14% |
| 1989 | 758.42 | 4.82% |
| 1990 | 799.36 | 5.40% |
| 1991 | 833.21 | 4.21% |
| 1992 | 858.45 | 3.01% |
| 1993 | 883.79 | 2.99% |
| 1994 | 906.83 | 2.56% |
| 1995 | 932.27 | 2.83% |
| 1996 | 959.6 | 2.95% |
| 1997 | 982.03 | 2.29% |
| 1998 | 997.27 | 1.56% |
| 1999 | 1019.09 | 2.21% |
| 2000 | 1053.51 | 3.36% |
| 2001 | 1083.28 | 2.85% |
| 2002 | 1100.46 | 1.58% |
| 2003 | 1125.44 | 2.28% |
| 2004 | 1155.57 | 2.66% |
| 2005 | 1194.78 | 3.39% |
| 2006 | 1233.32 | 3.23% |
| 2007 | 1268.51 | 2.85% |
| 2008 | 1317.2 | 3.84% |
| 2009 | 1312.52 | -0.36% |
| 2010 | 1334.05 | 1.64% |
| 2011 | 1376.16 | 3.16% |
| 2012 | 1404.64 | 2.07% |
| 2013 | 1425.21 | 1.46% |
| 2014 | 1448.33 | 1.62% |
| 2015 | 1450.05 | 0.12% |
| 2016 | 1468.35 | 1.26% |
| 2017 | 1499.71 | 2.13% |
| 2018 | 1536.3 | 2.49% |
| 2019 | 1564.14 | 1.76% |
| 2020 | 1583.44 | 1.23% |
| 2021 | 1657.82 | 4.70% |
| 2022 | 1814.49 | 8.52% |
Conversion of 1980 dollars to today's price
Based on the 259.56% change in prices, the following 1980 amounts are shown in today's dollars:
| Initial value | Today value |
|---|---|
| $1 dollar in 1980 | $3.6 dollars today |
| $5 dollars in 1980 | $17.98 dollars today |
| $10 dollars in 1980 | $35.96 dollars today |
| $50 dollars in 1980 | $179.78 dollars today |
| $100 dollars in 1980 | $359.56 dollars today |
| $500 dollars in 1980 | $1797.79 dollars today |
| $1,000 dollars in 1980 | $3595.58 dollars today |
| $5,000 dollars in 1980 | $17977.91 dollars today |
| $10,000 dollars in 1980 | $35955.83 dollars today |
| $50,000 dollars in 1980 | $179779.13 dollars today |
| $100,000 dollars in 1980 | $359558.25 dollars today |
| $500,000 dollars in 1980 | $1797791.26 dollars today |
| $1,000,000 dollars in 1980 | $3595582.52 dollars today |
How to calculate the inflated value of $500 in 1980
To calculate the change in value between 1980 and today, we use the following inflation rate formula:
CPI Today / CPI in 1980 x USD Value in 1980 = Current USD Value
By plugging the values into the formula above, we get:
296.276/ 82.4 x $500 = $1797.79
To buy the same product that you could buy for $500 in 1980, you would need $1797.79 in 2022.
To calculate the cumulative or total inflation rate in the past 42 years between 1980 and 2022, we use the following formula:
CPI in 2022 - CPI in 1980 / CPI in 1980 x 100 = Cumulative Inflation Rate
By inserting the values to this equation, we get:
( 296.276 - 82.4 / 82.4) x 100 = 259.56%
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 $500 is worth today. We have 42 years between 2022 and 1980. The average inflation rate was 3.0938127224626%.
Plugging in the values into the formula, we get:
500 (1+ % 3.09/ 100 ) ^ 42 = $1797.79