The inflation rate in the United States between 2003 and 2006 was 9.59%, which translates into a total increase of $268.39. This means that 2,800 dollars in 2003 are equivalent to 3,068.39 dollars in 2006. In other words, the purchasing power of $2,800 in 2003 equals $3,068.39 in 2006. The average annual inflation rate between these periods was 3.1%.
The following chart depicts the equivalence of $2,800 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 (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.
The following table contains relevant indicators:
| Indicator | Value |
|---|---|
| Cumulative inflation from 2003 to 2006 | 9.59% |
| Avg. Annual inflation from 2003 to 2006 | 3.1% |
| CPI 2003 | 183.96 |
| CPI 2006 | 201.59 |
There are several ways to calculate the time value of money. Depending on the data available, results can be obtained by using the Consumer Price Index (CPI) formula or the compound interest formula.
When we have both the start and end years, we can use the following formula:
To obtain the values equivalent in buying power between 2003 and 2006, use the corresponding CPI values:
Given that money changes with time as a result of an inflation rate that acts as compound interest, we can use the following formula: FV = PV × (1 + i)n, where:
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 $2,800 worth today. There are 3 years between 2003 and 2006 and the average inflation rate was 3.0982%. Therefore, we can resolve the formula like this:
| Initial Value | Equivalent value | |
|---|---|---|
| $1 dollar in 2003 | → | $1.1 dollars in 2006 |
| $5 dollars in 2003 | → | $5.48 dollars in 2006 |
| $10 dollars in 2003 | → | $10.96 dollars in 2006 |
| $50 dollars in 2003 | → | $54.79 dollars in 2006 |
| $100 dollars in 2003 | → | $109.59 dollars in 2006 |
| $500 dollars in 2003 | → | $547.93 dollars in 2006 |
| $1,000 dollars in 2003 | → | $1,095.86 dollars in 2006 |
| $5,000 dollars in 2003 | → | $5,479.28 dollars in 2006 |
| $10,000 dollars in 2003 | → | $10,958.55 dollars in 2006 |
| $50,000 dollars in 2003 | → | $54,792.75 dollars in 2006 |
| $100,000 dollars in 2003 | → | $109,585.5 dollars in 2006 |
| $500,000 dollars in 2003 | → | $547,927.52 dollars in 2006 |
| $1,000,000 dollars in 2003 | → | $1,095,855.04 dollars in 2006 |
| Cumulative inflation 2003-2006 | 9.59% |
| Avg. annual inflation 2003-2006 | 3.1% |
| CPI 2003 | 183.96 |
| CPI 2006 | 201.59 |
| Period | Value |
|---|---|
| 2003 | 2,800 |
| 2004 | 2,874.96 |
| 2005 | 2,972.5 |
| 2006 | 3,068.39 |
All available years
Today's value of US dollars by year:
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