Posted in: Other - Business & Finance
Asia S asked:
Is there a formula or a way of calculating for the value of a dollar in 2009 vs 2020? How does the money account for the cost of living increases?
Is there a formula or a way of calculating for the value of a dollar in 2009 vs 2020? How does the money account for the cost of living increases?
April 22nd 2009
You need to use this
Future Value =
P(1+r)^T
P is the amount of money, r the infation rate (must be negative) and t the number of years (the ^ is the “to the power” symbol if you don’t know).
So at 3% inflation over the 11 years, the future value of 10,000 would be (in order of calculation)
(1-3%) = 97%
97% ^ 11 = 71.54%
Value = 71.54 * 10000 = 7154.