$1 in 2012 is worth $1.29 today.
The value of $1 from 2012 to 2022
$1 in 2012 has the purchasing power of about $1.29 today, a $0.29 increase in 10 years. Between 2012 and today, the dollar experienced an average annual inflation rate of 2.58%, resulting in a cumulative price increase of 29.04%.
According to the Bureau of Labor Statistics consumer price index, today's prices are several times higher than the average price since 2012.
In 2012, the inflation rate was 2.07%. Inflation is now 8.52% higher than it was last year. If this figure holds true, $1 today will be worth $9.52 next year in purchasing power.
Inflation from 2012 to 2022
| Summary | Value |
|---|---|
| Cumulative price change (from 2012 to today) | 29.04% |
| Average inflation rate (from 2012 to today) | 2.58% |
| Converted amount | $1.29 |
| Price Difference | $0.29 |
| CPI in 2012 | 229.6 |
| CPI in 2022 | 296.276 |
| Inflation in 2012 | 2.07% |
| Inflation in 2022 | 8.52% |
| $1 in 2012 | $1.29 in 2022 |
Buying power of $1 in 2012
If you had $1 in your hand in 2012, its adjusted value for inflation today would be $1.29. Put another way, you would need $1.29 to beat the rising inflation. When $1 becomes equivalent to $1.29 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 2012 dollars, it's evident how $1 loses its worth over 10 years.
Dollar inflation for $1 from 2012 to 2022
The below tabular column shows the effect of inflation on $1 in the year 2012 to the year 2012.
| Year | Dollar Value | Inflation Rate |
|---|---|---|
| 2012 | 1 | 2.07% |
| 2013 | 1.01 | 1.46% |
| 2014 | 1.03 | 1.62% |
| 2015 | 1.03 | 0.12% |
| 2016 | 1.05 | 1.26% |
| 2017 | 1.07 | 2.13% |
| 2018 | 1.09 | 2.49% |
| 2019 | 1.11 | 1.76% |
| 2020 | 1.13 | 1.23% |
| 2021 | 1.18 | 4.70% |
| 2022 | 1.29 | 8.52% |
Conversion of 2012 dollars to today's price
Based on the 29.04% change in prices, the following 2012 amounts are shown in today's dollars:
| Initial value | Today value |
|---|---|
| $1 dollar in 2012 | $1.29 dollars today |
| $5 dollars in 2012 | $6.45 dollars today |
| $10 dollars in 2012 | $12.9 dollars today |
| $50 dollars in 2012 | $64.52 dollars today |
| $100 dollars in 2012 | $129.04 dollars today |
| $500 dollars in 2012 | $645.2 dollars today |
| $1,000 dollars in 2012 | $1290.4 dollars today |
| $5,000 dollars in 2012 | $6452 dollars today |
| $10,000 dollars in 2012 | $12904.01 dollars today |
| $50,000 dollars in 2012 | $64520.03 dollars today |
| $100,000 dollars in 2012 | $129040.07 dollars today |
| $500,000 dollars in 2012 | $645200.35 dollars today |
| $1,000,000 dollars in 2012 | $1290400.7 dollars today |
How to calculate the inflated value of $1 in 2012
To calculate the change in value between 2012 and today, we use the following inflation rate formula:
CPI Today / CPI in 2012 x USD Value in 2012 = Current USD Value
By plugging the values into the formula above, we get:
296.276/ 229.6 x $1 = $1.29
To buy the same product that you could buy for $1 in 2012, you would need $1.29 in 2022.
To calculate the cumulative or total inflation rate in the past 10 years between 2012 and 2022, we use the following formula:
CPI in 2022 - CPI in 2012 / CPI in 2012 x 100 = Cumulative Inflation Rate
By inserting the values to this equation, we get:
( 296.276 - 229.6 / 229.6) x 100 = 29.04%
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 10 years between 2022 and 2012. The average inflation rate was 2.582306312942%.
Plugging in the values into the formula, we get:
1 (1+ % 2.58/ 100 ) ^ 10 = $1.29