$1 in 2021 is worth $1.09 today.
The value of $1 from 2021 to 2022
$1 in 2021 has the purchasing power of about $1.09 today, a $0.09 increase in 1 years. Between 2021 and today, the dollar experienced an average annual inflation rate of 9.34%, resulting in a cumulative price increase of 9.34%.
According to the Bureau of Labor Statistics consumer price index, today's prices are several times higher than the average price since 2021.
In 2021, the inflation rate was 4.7%. 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 2021 to 2022
| Summary | Value |
|---|---|
| Cumulative price change (from 2021 to today) | 9.34% |
| Average inflation rate (from 2021 to today) | 9.34% |
| Converted amount | $1.09 |
| Price Difference | $0.09 |
| CPI in 2021 | 270.97 |
| CPI in 2022 | 296.276 |
| Inflation in 2021 | 4.7% |
| Inflation in 2022 | 8.52% |
| $1 in 2021 | $1.09 in 2022 |
Buying power of $1 in 2021
If you had $1 in your hand in 2021, its adjusted value for inflation today would be $1.09. Put another way, you would need $1.09 to beat the rising inflation. When $1 becomes equivalent to $1.09 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 2021 dollars, it's evident how $1 loses its worth over 1 years.
Dollar inflation for $1 from 2021 to 2022
The below tabular column shows the effect of inflation on $1 in the year 2021 to the year 2021.
| Year | Dollar Value | Inflation Rate |
|---|---|---|
| 2021 | 1 | 4.7% |
| 2022 | 1.09 | 8.52% |
Conversion of 2021 dollars to today's price
Based on the 9.34% change in prices, the following 2021 amounts are shown in today's dollars:
| Initial value | Today value |
|---|---|
| $1 dollar in 2021 | $1.09 dollars today |
| $5 dollars in 2021 | $5.47 dollars today |
| $10 dollars in 2021 | $10.93 dollars today |
| $50 dollars in 2021 | $54.67 dollars today |
| $100 dollars in 2021 | $109.34 dollars today |
| $500 dollars in 2021 | $546.7 dollars today |
| $1,000 dollars in 2021 | $1093.39 dollars today |
| $5,000 dollars in 2021 | $5466.95 dollars today |
| $10,000 dollars in 2021 | $10933.9 dollars today |
| $50,000 dollars in 2021 | $54669.52 dollars today |
| $100,000 dollars in 2021 | $109339.04 dollars today |
| $500,000 dollars in 2021 | $546695.21 dollars today |
| $1,000,000 dollars in 2021 | $1093390.41 dollars today |
How to calculate the inflated value of $1 in 2021
To calculate the change in value between 2021 and today, we use the following inflation rate formula:
CPI Today / CPI in 2021 x USD Value in 2021 = Current USD Value
By plugging the values into the formula above, we get:
296.276/ 270.97 x $1 = $1.09
To buy the same product that you could buy for $1 in 2021, you would need $1.09 in 2022.
To calculate the cumulative or total inflation rate in the past 1 years between 2021 and 2022, we use the following formula:
CPI in 2022 - CPI in 2021 / CPI in 2021 x 100 = Cumulative Inflation Rate
By inserting the values to this equation, we get:
( 296.276 - 270.97 / 270.97) x 100 = 9.34%
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 1 years between 2022 and 2021. The average inflation rate was 9.3390412222755%.
Plugging in the values into the formula, we get:
1 (1+ % 9.34/ 100 ) ^ 1 = $1.09