# Value of 1988 US Dollars today

\$5,000 in 1988

\$11,292.97 in 2021

The inflation rate in the United States between 1988 and today has been 125.86%, which translates into a total increase of \$6,292.97. This means that 5,000 dollars in 1988 are equivalent to 11,292.97 dollars in 2021. In other words, the purchasing power of \$5,000 in 1988 equals \$11,292.97 today. The average annual inflation rate has been 2.43%.

## Inflation timeline in the United States (1988-2021)

The following chart depicts the equivalence of \$5,000 throughout the years due to 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 (USD) and using 6 decimal digits. Results show only up to 2 decimal digits to favour readability. Inflation data is provided by governments and international institutions on a monthly basis. Today's values were obtained by estimating figures from recent trends.

The following table contains relevant indicators:

Indicator Value
Total Inflation (1988-2021) 125.71%
Total Inflation* 125.86%
Annual inflation avg. (1988-2021) 2.5%
Annual inflation avg.* 2.43%
CPI 1988 48.69
CPI 2021 109.9
CPI today* 109.97
\$1 in 1988 \$2.26 in 2021

* Values extrapolated from the last official data to obtain today's values.

## How to calculate today's value of money after inflation?

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.

#### Using the compound interest 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, it indicates how much are \$5,000 worth today. There are 33 years between 1988 and 2021 and the average inflation rate has been 2.4252%. Therefore, we can resolve the formula like this:

FV = PV (1 + i)n = \$5000 * (1 + 0.02)33 = \$11,285.71

#### Using the CPI formula

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

Final value = Initial value *
CPI final/CPI initial

In this case, the CPI in 1988 was 48.69 and the CPI today is 109.97. Therefore,

Final value = Initial value *
CPI final/CPI initial
= \$5,000 *
109.9/48.69
= \$11,285.71

### USA inflation - Conversion table

Initial Value Equivalent value
\$1 dollar in 1988 \$2.26 dollars today
\$5 dollars in 1988 \$11.29 dollars today
\$10 dollars in 1988 \$22.59 dollars today
\$50 dollars in 1988 \$112.93 dollars today
\$100 dollars in 1988 \$225.86 dollars today
\$500 dollars in 1988 \$1,129.3 dollars today
\$1,000 dollars in 1988 \$2,258.59 dollars today
\$5,000 dollars in 1988 \$11,292.97 dollars today
\$10,000 dollars in 1988 \$22,585.93 dollars today
\$50,000 dollars in 1988 \$112,929.65 dollars today
\$100,000 dollars in 1988 \$225,859.3 dollars today
\$500,000 dollars in 1988 \$1,129,296.5 dollars today
\$1,000,000 dollars in 1988 \$2,258,593 dollars today

Period Value
1988 5,000
1989 5,220.97
1990 5,463.6
1991 5,797.23
1992 5,974.87
1993 6,148.18
1994 6,317.16
1995 6,486.14
1996 6,650.78
1997 6,871.75
1998 6,988.73
1999 7,101.39
2000 7,292.03
2001 7,538.99
2002 7,655.98
2003 7,837.96
2004 7,985.27
2005 8,245.23
2006 8,526.86
2007 8,743.5
2008 9,100.35
2009 9,108.67
2010 9,356.54
2011 9,496.49
2012 9,777.82
2013 9,948.05
2014 10,097.44
2015 10,173.83
2016 10,248.05
2017 10,460.66
2018 10,681.28
2019 10,885.31
2020 11,134.06
2021 11,285.71
Today 11,292.97