$500 in 2008 is worth $688.05 today.
The value of $500 from 2008 to 2022
$500 in 2008 has the purchasing power of about $688.05 today, a $188.05 increase in 14 years. Between 2008 and today, the dollar experienced an average annual inflation rate of 2.31%, resulting in a cumulative price increase of 37.61%.
According to the Bureau of Labor Statistics consumer price index, today's prices are several times higher than the average price since 2008.
In 2008, the inflation rate was 3.84%. 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 2008 to 2022
| Summary | Value |
|---|---|
| Cumulative price change (from 2008 to today) | 37.61% |
| Average inflation rate (from 2008 to today) | 2.31% |
| Converted amount | $688.05 |
| Price Difference | $188.05 |
| CPI in 2008 | 215.3 |
| CPI in 2022 | 296.276 |
| Inflation in 2008 | 3.84% |
| Inflation in 2022 | 8.52% |
| $500 in 2008 | $688.05 in 2022 |
Buying power of $500 in 2008
If you had $500 in your hand in 2008, its adjusted value for inflation today would be $688.05. Put another way, you would need $688.05 to beat the rising inflation. When $500 becomes equivalent to $688.05 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 2008 dollars, it's evident how $500 loses its worth over 14 years.
Dollar inflation for $500 from 2008 to 2022
The below tabular column shows the effect of inflation on $500 in the year 2008 to the year 2008.
| Year | Dollar Value | Inflation Rate |
|---|---|---|
| 2008 | 500 | 3.84% |
| 2009 | 498.22 | -0.36% |
| 2010 | 506.39 | 1.64% |
| 2011 | 522.38 | 3.16% |
| 2012 | 533.19 | 2.07% |
| 2013 | 541 | 1.46% |
| 2014 | 549.78 | 1.62% |
| 2015 | 550.43 | 0.12% |
| 2016 | 557.37 | 1.26% |
| 2017 | 569.28 | 2.13% |
| 2018 | 583.17 | 2.49% |
| 2019 | 593.73 | 1.76% |
| 2020 | 601.06 | 1.23% |
| 2021 | 629.3 | 4.70% |
| 2022 | 688.76 | 8.52% |
Conversion of 2008 dollars to today's price
Based on the 37.61% change in prices, the following 2008 amounts are shown in today's dollars:
| Initial value | Today value |
|---|---|
| $1 dollar in 2008 | $1.38 dollars today |
| $5 dollars in 2008 | $6.88 dollars today |
| $10 dollars in 2008 | $13.76 dollars today |
| $50 dollars in 2008 | $68.81 dollars today |
| $100 dollars in 2008 | $137.61 dollars today |
| $500 dollars in 2008 | $688.05 dollars today |
| $1,000 dollars in 2008 | $1376.11 dollars today |
| $5,000 dollars in 2008 | $6880.54 dollars today |
| $10,000 dollars in 2008 | $13761.08 dollars today |
| $50,000 dollars in 2008 | $68805.39 dollars today |
| $100,000 dollars in 2008 | $137610.78 dollars today |
| $500,000 dollars in 2008 | $688053.88 dollars today |
| $1,000,000 dollars in 2008 | $1376107.76 dollars today |
How to calculate the inflated value of $500 in 2008
To calculate the change in value between 2008 and today, we use the following inflation rate formula:
CPI Today / CPI in 2008 x USD Value in 2008 = Current USD Value
By plugging the values into the formula above, we get:
296.276/ 215.3 x $500 = $688.05
To buy the same product that you could buy for $500 in 2008, you would need $688.05 in 2022.
To calculate the cumulative or total inflation rate in the past 14 years between 2008 and 2022, we use the following formula:
CPI in 2022 - CPI in 2008 / CPI in 2008 x 100 = Cumulative Inflation Rate
By inserting the values to this equation, we get:
( 296.276 - 215.3 / 215.3) x 100 = 37.61%
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 14 years between 2022 and 2008. The average inflation rate was 2.3066221690889%.
Plugging in the values into the formula, we get:
500 (1+ % 2.31/ 100 ) ^ 14 = $688.05