This tool is useful to calculate the time value of money based on historical inflation and CPI values. To start, select an amount and two years, or browse the default calculation results.

£100 in 1956

£2,135.01 in 2021

The inflation rate in United Kingdom between 1956 and 2021 was 2,035.01%, which translates into a total increase of £2,035.01. This means that **100 pounds in 1956 are equivalent to 2,135.01 pounds in 2021**. In other words, the purchasing power of £100 in 1956 equals £2,135.01 in 2021. The average annual inflation rate between these periods was 4.82%.

The following chart depicts the equivalence of british pounds throughout the years due to compound inflation and CPI changes. All values are equivalent in terms of purchasing power, which means that for each year the same goods or services could be bought with the indicated amount of money.

All calculations are performed in the local currency (GBP) and using 6 decimal digits. Results show only up to 2 decimal digits to favour readability.

The following table contains relevant indicators:

Indicator | Value |
---|---|

Total Inflation (1956-2021) | 2,035.01% |

Annual inflation avg. (1956-2021) | 4.82% |

CPI 1956 | 5.12 |

CPI 2021 | 109.4 |

£1 in 1956 | £21.35 in 2021 |

There are several ways to calculate the time value of money. Depending on the data available, results can be obtained by using the compound interest formula or the Consumer Price Index (CPI) formula.

Given that money changes with time as a result of an inflation rate that acts as a compound interest, the following formula can be used: **FV = PV (1 + i) ^{n}**, where:

- FV: Future Value
- PV: Present Value
- i: Interest rate (inflation)
- n: Number of times the interest is compounded (i.e. # of years)

In this case, the future value represents the final amount obtained after applying the inflation rate to our initial value. In other words, the future value is the amount in 2021 that equals £100 in 1956 in terms of purchasing power. There are 65 years between 1956 and 2021 and the average inflation rate was 4.822%. Therefore, we can resolve the formula like this:

**FV = PV (1 + i) ^{n} = £100 * (1 + 0.04822)^{65} = £2,135.010741 ≈ £2,135.01**

When the CPI for both start and end years is known, the following formula can be used:

Final value = Initial value *

CPI finalCPI initial

In this case, the CPI in 1956 was 5.12 and in 2021 was 109.4. Therefore,

Final value = Initial value *

CPI finalCPI initial

= £100 *
109.45.12

= £2,135.01
Initial Value | Equivalent value | |
---|---|---|

£1 pound in 1956 | £21.35 pounds in 2021 | |

£5 pounds in 1956 | £106.75 pounds in 2021 | |

£10 pounds in 1956 | £213.5 pounds in 2021 | |

£50 pounds in 1956 | £1,067.51 pounds in 2021 | |

£100 pounds in 1956 | £2,135.01 pounds in 2021 | |

£500 pounds in 1956 | £10,675.05 pounds in 2021 | |

£1,000 pounds in 1956 | £21,350.11 pounds in 2021 | |

£5,000 pounds in 1956 | £106,750.54 pounds in 2021 | |

£10,000 pounds in 1956 | £213,501.07 pounds in 2021 | |

£50,000 pounds in 1956 | £1,067,505.37 pounds in 2021 | |

£100,000 pounds in 1956 | £2,135,010.74 pounds in 2021 | |

£500,000 pounds in 1956 | £10,675,053.71 pounds in 2021 | |

£1,000,000 pounds in 1956 | £21,350,107.41 pounds in 2021 |

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