## Why a dollar today is worth only 20% of a dollar in 1975

*Updated: September 14, 2021*

$100 in 1975 is equivalent in purchasing power to about $508.49 today, an increase of $408.49 over 46 years.The dollar had an average inflation rate of 3.60% per year between 1975 and today, producing a cumulative price increase of 408.49%.

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This means that today"s prices are5.08 times higher thanaverage prices since 1975,according to the Bureau of Labor Statistics consumer price index.A dollar today only buys 19.67% of what it could buy back then.

The 1975 inflation rate was 9.13%. The current year-over-year inflation rate (2020 to 2021) is now 5.25%1.If this number holds, $100 today will be equivalent in buying power to $105.25 next year.The current inflation rate page gives more detail on the latest inflation rates.

Contents

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Inflation from 1975 to 2021

Cumulative price change | 408.49% |

Average inflation rate | 3.60% |

Converted amount ($100 base) | $508.49 |

Price difference ($100 base) | $408.49 |

CPI in 1975 | 53.800 |

CPI in 2021 | 273.567 |

Inflation in 1975 | 9.13% |

Inflation in 2021 | 5.25% |

$100 in 1975 | $508.49 in 2021 |

USD Inflation since 1913

Annual Rate, the Bureau of Labor Statistics CPI

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## Buying power of $100 in 1975

This chart shows a calculation of buying power equivalence for $100 in 1975 (price index tracking began in 1635).

For example, if you started with $100, you would need to end with $508.49 in order to "adjust" for inflation (sometimes refered to as "beating inflation").

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When $100 is equivalent to $508.49 over time, that means that the "real value" of a single U.S. dollar decreases over time. In other words, a dollar will pay for fewer items at the store.

This effect explains how inflation erodes the value of a dollar over time. By calculating the value in 1975 dollars, the chart below shows how $100 is worth less over 46 years.

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According to the Bureau of Labor Statistics, each of these USD amounts below is equal in terms of what it could buy at the time:

Dollar inflation: 1975-2021YearDollar ValueInflation Rate1975$100.009.13%1976$105.765.76%1977$112.646.50%1978$121.197.59%1979$134.9411.35%1980$153.1613.50%1981$168.9610.32%1982$179.376.16%1983$185.133.21%1984$193.124.32%1985$200.003.56%1986$203.721.86%1987$211.153.65%1988$219.894.14%1989$230.484.82%1990$242.945.40%1991$253.164.21%1992$260.783.01%1993$268.592.99%1994$275.462.56%1995$283.272.83%1996$291.642.95%1997$298.332.29%1998$302.971.56%1999$309.672.21%2000$320.073.36%2001$329.182.85%2002$334.391.58%2003$342.012.28%2004$351.122.66%2005$363.013.39%2006$374.723.23%2007$385.392.85%2008$400.193.84%2009$398.77-0.36%2010$405.311.64%2011$418.103.16%2012$426.752.07%2013$433.011.46%2014$440.031.62%2015$440.550.12%2016$446.111.26%2017$455.612.13%2018$466.972.49%2019$475.201.76%2020$481.061.23%2021$508.495.70%** Compared to previous annual rate. Not final. See inflation summary for latest 12-month trailing value.

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This conversion table shows various other 1975 amounts in today"s dollars, based on the 408.49% change in prices:

Conversion: 1975 dollars todayInitial valueEquivalent value

$1dollarin 1975 | $5.08dollarstoday |

$5dollarsin 1975 | $25.42dollarstoday |

$10dollarsin 1975 | $50.85dollarstoday |

$50dollarsin 1975 | $254.24dollarstoday |

$100dollarsin 1975 | $508.49dollarstoday |

$500dollarsin 1975 | $2,542.44dollarstoday |

$1,000dollarsin 1975 | $5,084.89dollarstoday |

$5,000dollarsin 1975 | $25,424.44dollarstoday |

$10,000dollarsin 1975 | $50,848.88dollarstoday |

$50,000dollarsin 1975 | $254,244.42dollarstoday |

$100,000dollarsin 1975 | $508,488.85dollarstoday |

$500,000dollarsin 1975 | $2,542,444.24dollarstoday |

$1,000,000dollarsin 1975 | $5,084,888.48dollarstoday |

## Inflation by City

Inflation can vary widely by city, even within the United States. Here"s how some cities fared in 1975 to 2021 (figures shown are purchasing power equivalents of $100):

San Francisco, California experienced the highest rate of inflation during the 46 years between 1975 and 2021 (3.97%).

Detroit, Michigan experienced the lowest rate of inflation during the 46 years between 1975 and 2021 (3.34%).

Note that some locations showing 0% inflation may have not yet reported latest data.

## Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £100.00 in 1975 would be equivalent to £860.50 in 2021, an absolute change of £760.50 and a cumulative change of 760.50%.

In Canada, CA$100.00 in 1975 would be equivalent to CA$454.97 in 2021, an absolute change of CA$354.97 and a cumulative change of 354.97%.

Compare these numbers to the US"s overall absolute change of $408.49 and total percent change of 408.49%.

## Inflation by Spending Category

CPI is the weighted combination of many categories of spending that are tracked by the government. Breaking down these categories helps explain the main drivers behind price changes. This chart shows the average rate of inflation for select CPI categories between 1975 and 2021.

Compare these values to the overall average of 3.60% per year:

CategoryAvg Inflation (%)Total Inflation (%)$100 in 1975 → 2021Food and beverages3.34354.23454.23Housing3.77449.13549.13Apparel1.1065.59165.59Transportation3.32348.71448.71Medical care5.361,003.701,103.70Recreation1.1367.39167.39Education and communication1.83130.06230.06Other goods and services4.83777.57877.57

The graph below compares inflation in categories of goods over time. Click on a category such as "Food" to toggle it on or off:

For all these visualizations, it"s important to note that not all categories may have been tracked since 1975. This table and charts use the earliest available data for each category.

Inflation rates of specific categoriesMedical Care· Housing· Rent· Food·

*More*

Inflation-adjusted measuresS&P 500 price·S&P 500 earnings·Shiller P/E

## How to Calculate Inflation Rate for $100 since 1975

Our calculations use the following inflation rate formula to calculate the change in value between 1975 and today:

CPI todayCPI in 1975

×

1975 USD value

=

Today"s value

Then plug in historical CPI values. The U.S. CPI was 53.8 in the year 1975 and 273.567 in 2021:

273.56753.8

×

$100

=

**$508.49**

$100 in 1975 has the same "purchasing power" or "buying power" as $508.49 in 2021.

To get the total inflation rate for the 46 years between 1975 and 2021, we use the following formula:

CPI in 2021 - CPI in 1975CPI in 1975

×

100

=

**Cumulative inflation rate (46 years)**

Plugging in the values to this equation, we get:

273.567 - 53.853.8

×

100

=

**408%**

## Alternate Measurements of Inflation

The above data describe the CPI for all items. Also of note is the **Core CPI**, which measures inflation for all items except for the more volatile categories of food and energy.Core inflation averaged 3.61% per year between 1975 and 2021 (vs all-CPI inflation of 3.60%), for an inflation total of 410.02%.

When using the core inflation measurement, $100 in 1975 is equivalent in buying power to $510.02 in 2021, a difference of $410.02. Recall that for All Items, the converted amount is $508.49 with a difference of $408.49.

In 1975, core inflation was 9.21%.

## Comparison to S&P 500 Index

The average inflation rate of 3.60% has a compounding effect between 1975 and 2021. As noted above, this yearly inflation rate compounds to produce an overall price difference of 408.49% over 46 years.

To help put this inflation into perspective, if we had invested $100 in the S&P 500 index in 1975, our investment would be *nominally* worth approximately $22,377.82 in 2021. This is a return on investment of 22,277.82%, with an absolute return of $22,277.82 on top of the original $100.

These numbers are not inflation adjusted, so they are considered *nominal*. In order to evaluate the *real* return on our investment, we must calculate the return with inflation taken into account.

The compounding effect of inflation would account for 80.33% of returns ($17,976.98) during this period. This means the inflation-adjusted *real* return of our $100 investment is $4,300.85. You may also want to account for capital gains tax, which would take your real return down to around $3,656 for most people.

Investment in S&P 500 Index, 1975-2021Original AmountFinal AmountChange

Nominal | $100 | $22,377.82 | 22,277.82% |

RealInflation Adjusted | $100 | $4,400.85 | 4,300.85% |

Information displayed above may differ slightly from other S&P 500 calculators. Minor discrepancies can occur because we use the latest CPI data for inflation, annualized inflation numbers for previous years, and we compute S&P price and dividends from January of 1975 to latest available data for 2021 using average monthly close price.

For more details on the S&P 500 between 1975 and 2021, see the stock market returns calculator.

## News headlines from 1975

Politics and news often influence economic performance. Here"s what was happening at the time:

Margaret Thatcher becomes leader of the British Conservative Party, after defeating Edward Heath.Ethiopia abrogates its 3,000-year-old monarchy.Bill Gates and Paul Allen found Microsoft.The US signals the beginning of the end of its involvement Vietnam, after it begins to evacuate its citizens from Saigon.Gough Whitlam is removed by Governor General Sir John Kerr: the first time an elected Prime Minister had been deposed in 200 years (Australia).## Data Source & Citation

Raw data for these calculations comes fromthe Bureau of Labor Statistics"Consumer Price Index(CPI), established in 1913. Inflation data from 1665 to1912 is sourced from a historical study conducted by political scienceprofessor Robert Sahr at Oregon State University.

You may use the following MLA citation for this page:“Value of 1975 dollars today | Inflation Calculator.” Official Inflation Data, Alioth Finance, 3 Oct. 2021, https://www.officialdata.org/us/inflation/1975.

Special thanks to QuickChart for their chart image API, which is used for chart downloads.

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mmsanotherstage2019.com is a reference website maintained by the Official Data Foundation.