# 2020 Inflation Calculator

Amount in 2020:

RESULT: \$1 in 2020 is worth \$1.14 today.

You might be interested in calculating the value of \$1 for the year 2021.

# \$1 in 2020 is worth \$1.14 today.

## The value of \$1 from 2020 to 2022

\$1 in 2020 has the purchasing power of about \$1.14 today, a \$0.14 increase in 2 years. Between 2020 and today, the dollar experienced an average annual inflation rate of 6.99%, resulting in a cumulative price increase of 14.48%.

According to the Bureau of Labor Statistics consumer price index, today's prices are several times higher than the average price since 2020.

In 2020, the inflation rate was 1.23%. 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 2020 to 2022

Summary Value
Cumulative price change (from 2020 to today) 14.48%
Average inflation rate (from 2020 to today) 6.99%
Converted amount \$1.14
Price Difference \$0.14
CPI in 2020 258.812
CPI in 2022 296.276
Inflation in 2020 1.23%
Inflation in 2022 8.52%
\$1 in 2020 \$1.14 in 2022

## Buying power of \$1 in 2020

If you had \$1 in your hand in 2020, its adjusted value for inflation today would be \$1.14. Put another way, you would need \$1.14 to beat the rising inflation. When \$1 becomes equivalent to \$1.14 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 2020 dollars, it's evident how \$1 loses its worth over 2 years.

## Dollar inflation for \$1 from 2020 to 2022

The below tabular column shows the effect of inflation on \$1 in the year 2020 to the year 2020.

Year Dollar Value Inflation Rate
2020 1 1.23%
2021 1.05 4.70%
2022 1.15 8.52%

## Conversion of 2020 dollars to today's price

Based on the 14.48% change in prices, the following 2020 amounts are shown in today's dollars:

Initial value Today value
\$1 dollar in 2020 \$1.14 dollars today
\$5 dollars in 2020 \$5.72 dollars today
\$10 dollars in 2020 \$11.45 dollars today
\$50 dollars in 2020 \$57.24 dollars today
\$100 dollars in 2020 \$114.48 dollars today
\$500 dollars in 2020 \$572.38 dollars today
\$1,000 dollars in 2020 \$1144.75 dollars today
\$5,000 dollars in 2020 \$5723.77 dollars today
\$10,000 dollars in 2020 \$11447.54 dollars today
\$50,000 dollars in 2020 \$57237.69 dollars today
\$100,000 dollars in 2020 \$114475.37 dollars today
\$500,000 dollars in 2020 \$572376.86 dollars today
\$1,000,000 dollars in 2020 \$1144753.72 dollars today

## How to calculate the inflated value of \$1 in 2020

To calculate the change in value between 2020 and today, we use the following inflation rate formula:

CPI Today / CPI in 2020 x USD Value in 2020 = Current USD Value

By plugging the values into the formula above, we get:

296.276/ 258.812 x \$1 = \$1.14

To buy the same product that you could buy for \$1 in 2020, you would need \$1.14 in 2022.

### To calculate the cumulative or total inflation rate in the past 2 years between 2020 and 2022, we use the following formula:

CPI in 2022 - CPI in 2020 / CPI in 2020 x 100 = Cumulative Inflation Rate

By inserting the values to this equation, we get:

( 296.276 - 258.812 / 258.812) x 100 = 14.48%

### 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 2 years between 2022 and 2020. The average inflation rate was 6.9931643072381%.

Plugging in the values into the formula, we get:

1 (1+ % 6.99/ 100 ) ^ 2 = \$1.14