$1 in 1981 is worth $3.26 today.
The value of $1 from 1981 to 2022
$1 in 1981 has the purchasing power of about $3.26 today, a $2.26 increase in 41 years. Between 1981 and today, the dollar experienced an average annual inflation rate of 2.92%, resulting in a cumulative price increase of 225.94%.
According to the Bureau of Labor Statistics consumer price index, today's prices are several times higher than the average price since 1981.
In 1981, the inflation rate was 13.55%. Inflation is now 10.33% higher than it was last year. If this figure holds true, $1 today will be worth $11.33 next year in purchasing power.
Inflation from 1981 to 2022
| Summary | Value |
|---|---|
| Cumulative price change (from 1981 to today) | 225.94% |
| Average inflation rate (from 1981 to today) | 2.92% |
| Converted amount | $3.26 |
| Price Difference | $2.26 |
| CPI in 1981 | 90.9 |
| CPI in 2022 | 296.276 |
| Inflation in 1981 | 13.55% |
| Inflation in 2022 | 10.33% |
| $1 in 1981 | $3.26 in 2022 |
Buying power of $1 in 1981
If you had $1 in your hand in 1981, its adjusted value for inflation today would be $3.26. Put another way, you would need $3.26 to beat the rising inflation. When $1 becomes equivalent to $3.26 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 1981 dollars, it's evident how $1 loses its worth over 41 years.
Dollar inflation for $1 from 1981 to 2022
The below tabular column shows the effect of inflation on $1 in the year 1981 to the year 1981.
| Year | Dollar Value | Inflation Rate |
|---|---|---|
| 1981 | 1 | 13.55% |
| 1982 | 1.06 | 6.16% |
| 1983 | 1.1 | 3.21% |
| 1984 | 1.14 | 4.32% |
| 1985 | 1.18 | 3.56% |
| 1986 | 1.21 | 1.86% |
| 1987 | 1.25 | 3.65% |
| 1988 | 1.3 | 4.14% |
| 1989 | 1.36 | 4.82% |
| 1990 | 1.44 | 5.40% |
| 1991 | 1.5 | 4.21% |
| 1992 | 1.54 | 3.01% |
| 1993 | 1.59 | 2.99% |
| 1994 | 1.63 | 2.56% |
| 1995 | 1.68 | 2.83% |
| 1996 | 1.73 | 2.95% |
| 1997 | 1.77 | 2.29% |
| 1998 | 1.79 | 1.56% |
| 1999 | 1.83 | 2.21% |
| 2000 | 1.89 | 3.36% |
| 2001 | 1.95 | 2.85% |
| 2002 | 1.98 | 1.58% |
| 2003 | 2.02 | 2.28% |
| 2004 | 2.08 | 2.66% |
| 2005 | 2.15 | 3.39% |
| 2006 | 2.22 | 3.23% |
| 2007 | 2.28 | 2.85% |
| 2008 | 2.37 | 3.84% |
| 2009 | 2.36 | -0.36% |
| 2010 | 2.4 | 1.64% |
| 2011 | 2.47 | 3.16% |
| 2012 | 2.53 | 2.07% |
| 2013 | 2.56 | 1.46% |
| 2014 | 2.6 | 1.62% |
| 2015 | 2.61 | 0.12% |
| 2016 | 2.64 | 1.26% |
| 2017 | 2.7 | 2.13% |
| 2018 | 2.76 | 2.49% |
| 2019 | 2.81 | 1.76% |
| 2020 | 2.85 | 1.23% |
| 2021 | 2.98 | 4.70% |
| 2022 | 3.26 | 8.52% |
Conversion of 1981 dollars to today's price
Based on the 225.94% change in prices, the following 1981 amounts are shown in today's dollars:
| Initial value | Today value |
|---|---|
| $1 dollar in 1981 | $3.26 dollars today |
| $5 dollars in 1981 | $16.3 dollars today |
| $10 dollars in 1981 | $32.59 dollars today |
| $50 dollars in 1981 | $162.97 dollars today |
| $100 dollars in 1981 | $325.94 dollars today |
| $500 dollars in 1981 | $1629.68 dollars today |
| $1,000 dollars in 1981 | $3259.36 dollars today |
| $5,000 dollars in 1981 | $16296.81 dollars today |
| $10,000 dollars in 1981 | $32593.62 dollars today |
| $50,000 dollars in 1981 | $162968.1 dollars today |
| $100,000 dollars in 1981 | $325936.19 dollars today |
| $500,000 dollars in 1981 | $1629680.97 dollars today |
| $1,000,000 dollars in 1981 | $3259361.94 dollars today |
How to calculate the inflated value of $1 in 1981
To calculate the change in value between 1981 and today, we use the following inflation rate formula:
CPI Today / CPI in 1981 x USD Value in 1981 = Current USD Value
By plugging the values into the formula above, we get:
296.276/ 90.9 x $1 = $3.26
To buy the same product that you could buy for $1 in 1981, you would need $3.26 in 2022.
To calculate the cumulative or total inflation rate in the past 41 years between 1981 and 2022, we use the following formula:
CPI in 2022 - CPI in 1981 / CPI in 1981 x 100 = Cumulative Inflation Rate
By inserting the values to this equation, we get:
( 296.276 - 90.9 / 90.9) x 100 = 225.94%
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 41 years between 2022 and 1981. The average inflation rate was 2.9237091848634%.
Plugging in the values into the formula, we get:
1 (1+ % 2.92/ 100 ) ^ 41 = $3.26