$1000000 in 2018 is worth $1182738.52 today.
The value of $1000000 from 2018 to 2022
$1000000 in 2018 has the purchasing power of about $1182738.52 today, a $182738.52 increase in 4 years. Between 2018 and today, the dollar experienced an average annual inflation rate of 4.29%, resulting in a cumulative price increase of 18.27%.
According to the Bureau of Labor Statistics consumer price index, today's prices are several times higher than the average price since 2018.
In 2018, the inflation rate was 2.44%. Inflation is now 8.52% higher than it was last year. If this figure holds true, $1000000 today will be worth $9520000 next year in purchasing power.
Inflation from 2018 to 2022
| Summary | Value |
|---|---|
| Cumulative price change (from 2018 to today) | 18.27% |
| Average inflation rate (from 2018 to today) | 4.29% |
| Converted amount | $1182738.52 |
| Price Difference | $182738.52 |
| CPI in 2018 | 250.5 |
| CPI in 2022 | 296.276 |
| Inflation in 2018 | 2.44% |
| Inflation in 2022 | 8.52% |
| $1000000 in 2018 | $1182738.52 in 2022 |
Buying power of $1000000 in 2018
If you had $1000000 in your hand in 2018, its adjusted value for inflation today would be $1182738.52. Put another way, you would need $1182738.52 to beat the rising inflation. When $1000000 becomes equivalent to $1182738.52 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 2018 dollars, it's evident how $1000000 loses its worth over 4 years.
Dollar inflation for $1000000 from 2018 to 2022
The below tabular column shows the effect of inflation on $1000000 in the year 2018 to the year 2018.
| Year | Dollar Value | Inflation Rate |
|---|---|---|
| 2018 | 1000000 | 2.44% |
| 2019 | 1018120 | 1.76% |
| 2020 | 1030679.37 | 1.23% |
| 2021 | 1079099.23 | 4.70% |
| 2022 | 1181074.11 | 8.52% |
Conversion of 2018 dollars to today's price
Based on the 18.27% change in prices, the following 2018 amounts are shown in today's dollars:
| Initial value | Today value |
|---|---|
| $1 dollar in 2018 | $1.18 dollars today |
| $5 dollars in 2018 | $5.91 dollars today |
| $10 dollars in 2018 | $11.83 dollars today |
| $50 dollars in 2018 | $59.14 dollars today |
| $100 dollars in 2018 | $118.27 dollars today |
| $500 dollars in 2018 | $591.37 dollars today |
| $1,000 dollars in 2018 | $1182.74 dollars today |
| $5,000 dollars in 2018 | $5913.69 dollars today |
| $10,000 dollars in 2018 | $11827.39 dollars today |
| $50,000 dollars in 2018 | $59136.93 dollars today |
| $100,000 dollars in 2018 | $118273.85 dollars today |
| $500,000 dollars in 2018 | $591369.26 dollars today |
| $1,000,000 dollars in 2018 | $1182738.52 dollars today |
How to calculate the inflated value of $1000000 in 2018
To calculate the change in value between 2018 and today, we use the following inflation rate formula:
CPI Today / CPI in 2018 x USD Value in 2018 = Current USD Value
By plugging the values into the formula above, we get:
296.276/ 250.5 x $1000000 = $1182738.52
To buy the same product that you could buy for $1000000 in 2018, you would need $1182738.52 in 2022.
To calculate the cumulative or total inflation rate in the past 4 years between 2018 and 2022, we use the following formula:
CPI in 2022 - CPI in 2018 / CPI in 2018 x 100 = Cumulative Inflation Rate
By inserting the values to this equation, we get:
( 296.276 - 250.5 / 250.5) x 100 = 18.27%
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 $1000000 is worth today. We have 4 years between 2022 and 2018. The average inflation rate was 4.2850816745961%.
Plugging in the values into the formula, we get:
1000000 (1+ % 4.29/ 100 ) ^ 4 = $1182738.52