$1 in 1986 is worth $2.7 today.
The value of $1 from 1986 to 2022
$1 in 1986 has the purchasing power of about $2.7 today, a $1.7 increase in 36 years. Between 1986 and today, the dollar experienced an average annual inflation rate of 2.8%, resulting in a cumulative price increase of 170.32%.
According to the Bureau of Labor Statistics consumer price index, today's prices are several times higher than the average price since 1986.
In 1986, the inflation rate was 13.55%. Inflation is now 1.9% higher than it was last year. If this figure holds true, $1 today will be worth $2.9 next year in purchasing power.
Inflation from 1986 to 2022
| Summary | Value |
|---|---|
| Cumulative price change (from 1986 to today) | 170.32% |
| Average inflation rate (from 1986 to today) | 2.8% |
| Converted amount | $2.7 |
| Price Difference | $1.7 |
| CPI in 1986 | 109.6 |
| CPI in 2022 | 296.276 |
| Inflation in 1986 | 13.55% |
| Inflation in 2022 | 1.9% |
| $1 in 1986 | $2.7 in 2022 |
Buying power of $1 in 1986
If you had $1 in your hand in 1986, its adjusted value for inflation today would be $2.7. Put another way, you would need $2.7 to beat the rising inflation. When $1 becomes equivalent to $2.7 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 1986 dollars, it's evident how $1 loses its worth over 36 years.
Dollar inflation for $1 from 1986 to 2022
The below tabular column shows the effect of inflation on $1 in the year 1986 to the year 1986.
| Year | Dollar Value | Inflation Rate |
|---|---|---|
| 1986 | 1 | 13.55% |
| 1987 | 1.04 | 3.65% |
| 1988 | 1.08 | 4.14% |
| 1989 | 1.13 | 4.82% |
| 1990 | 1.19 | 5.40% |
| 1991 | 1.24 | 4.21% |
| 1992 | 1.28 | 3.01% |
| 1993 | 1.32 | 2.99% |
| 1994 | 1.35 | 2.56% |
| 1995 | 1.39 | 2.83% |
| 1996 | 1.43 | 2.95% |
| 1997 | 1.46 | 2.29% |
| 1998 | 1.49 | 1.56% |
| 1999 | 1.52 | 2.21% |
| 2000 | 1.57 | 3.36% |
| 2001 | 1.62 | 2.85% |
| 2002 | 1.64 | 1.58% |
| 2003 | 1.68 | 2.28% |
| 2004 | 1.72 | 2.66% |
| 2005 | 1.78 | 3.39% |
| 2006 | 1.84 | 3.23% |
| 2007 | 1.89 | 2.85% |
| 2008 | 1.96 | 3.84% |
| 2009 | 1.96 | -0.36% |
| 2010 | 1.99 | 1.64% |
| 2011 | 2.05 | 3.16% |
| 2012 | 2.09 | 2.07% |
| 2013 | 2.13 | 1.46% |
| 2014 | 2.16 | 1.62% |
| 2015 | 2.16 | 0.12% |
| 2016 | 2.19 | 1.26% |
| 2017 | 2.24 | 2.13% |
| 2018 | 2.29 | 2.49% |
| 2019 | 2.33 | 1.76% |
| 2020 | 2.36 | 1.23% |
| 2021 | 2.47 | 4.70% |
| 2022 | 2.71 | 8.52% |
Conversion of 1986 dollars to today's price
Based on the 170.32% change in prices, the following 1986 amounts are shown in today's dollars:
| Initial value | Today value |
|---|---|
| $1 dollar in 1986 | $2.7 dollars today |
| $5 dollars in 1986 | $13.52 dollars today |
| $10 dollars in 1986 | $27.03 dollars today |
| $50 dollars in 1986 | $135.16 dollars today |
| $100 dollars in 1986 | $270.32 dollars today |
| $500 dollars in 1986 | $1351.62 dollars today |
| $1,000 dollars in 1986 | $2703.25 dollars today |
| $5,000 dollars in 1986 | $13516.24 dollars today |
| $10,000 dollars in 1986 | $27032.48 dollars today |
| $50,000 dollars in 1986 | $135162.41 dollars today |
| $100,000 dollars in 1986 | $270324.82 dollars today |
| $500,000 dollars in 1986 | $1351624.09 dollars today |
| $1,000,000 dollars in 1986 | $2703248.18 dollars today |
How to calculate the inflated value of $1 in 1986
To calculate the change in value between 1986 and today, we use the following inflation rate formula:
CPI Today / CPI in 1986 x USD Value in 1986 = Current USD Value
By plugging the values into the formula above, we get:
296.276/ 109.6 x $1 = $2.7
To buy the same product that you could buy for $1 in 1986, you would need $2.7 in 2022.
To calculate the cumulative or total inflation rate in the past 36 years between 1986 and 2022, we use the following formula:
CPI in 2022 - CPI in 1986 / CPI in 1986 x 100 = Cumulative Inflation Rate
By inserting the values to this equation, we get:
( 296.276 - 109.6 / 109.6) x 100 = 170.32%
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 36 years between 2022 and 1986. The average inflation rate was 2.8008796993738%.
Plugging in the values into the formula, we get:
1 (1+ % 2.8/ 100 ) ^ 36 = $2.7