$40,000 in 1901 → $1,129,444.71 in 2016

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U.S. Inflation Rate, $40,000 in 1901 to 2016

According to the Bureau of Labor Statistics consumer price index, prices in 2016 are 2,723.61% higher than prices in 1901. The dollar experienced an average inflation rate of 2.95% per year during this period.

In other words, $40,000 in 1901 is equivalent in purchasing power to $1,129,444.71 in 2016, a difference of $1,089,444.71 over 115 years.

The 1901 inflation rate was 1.19%. The inflation rate in 2016 was 1.26%. The 2016 inflation rate is lower compared to the average inflation rate of 2.48% per year between 2016 and 2018.


Inflation from 1901 to 2016
Cumulative price change 2,723.61%
Average inflation rate 2.95%
Converted amount ($40,000 base) $1,129,444.71
Price difference ($40,000 base) $1,089,444.71
CPI in 1901 8.500
CPI in 2016 240.007
Inflation in 1901 1.19%
Inflation in 2016 1.26%


U.S. inflation chart since 1665


Buying power of $40,000 since 1901

This chart shows calculations of buying power equivalence over time for $40,000 in 1901 (price index tracking began in 1635).

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:

Year USD Value Inflation Rate
1901 $40,000.00 1.19%
1902 $40,470.59 1.18%
1903 $41,411.76 2.33%
1904 $41,882.35 1.14%
1905 $41,411.76 -1.12%
1906 $42,352.94 2.27%
1907 $44,235.29 4.44%
1908 $43,294.12 -2.13%
1909 $42,823.53 -1.09%
1910 $44,705.88 4.40%
1911 $44,705.88 0.00%
1912 $45,647.06 2.11%
1913 $46,588.24 2.06%
1914 $47,058.82 1.01%
1915 $47,529.41 1.00%
1916 $51,294.12 7.92%
1917 $60,235.29 17.43%
1918 $71,058.82 17.97%
1919 $81,411.76 14.57%
1920 $94,117.65 15.61%
1921 $84,235.29 -10.50%
1922 $79,058.82 -6.15%
1923 $80,470.59 1.79%
1924 $80,470.59 0.00%
1925 $82,352.94 2.34%
1926 $83,294.12 1.14%
1927 $81,882.35 -1.69%
1928 $80,470.59 -1.72%
1929 $80,470.59 0.00%
1930 $78,588.24 -2.34%
1931 $71,529.41 -8.98%
1932 $64,470.59 -9.87%
1933 $61,176.47 -5.11%
1934 $63,058.82 3.08%
1935 $64,470.59 2.24%
1936 $65,411.76 1.46%
1937 $67,764.71 3.60%
1938 $66,352.94 -2.08%
1939 $65,411.76 -1.42%
1940 $65,882.35 0.72%
1941 $69,176.47 5.00%
1942 $76,705.88 10.88%
1943 $81,411.76 6.13%
1944 $82,823.53 1.73%
1945 $84,705.88 2.27%
1946 $91,764.71 8.33%
1947 $104,941.18 14.36%
1948 $113,411.76 8.07%
1949 $112,000.00 -1.24%
1950 $113,411.76 1.26%
1951 $122,352.94 7.88%
1952 $124,705.88 1.92%
1953 $125,647.06 0.75%
1954 $126,588.24 0.75%
1955 $126,117.65 -0.37%
1956 $128,000.00 1.49%
1957 $132,235.29 3.31%
1958 $136,000.00 2.85%
1959 $136,941.18 0.69%
1960 $139,294.12 1.72%
1961 $140,705.88 1.01%
1962 $142,117.65 1.00%
1963 $144,000.00 1.32%
1964 $145,882.35 1.31%
1965 $148,235.29 1.61%
1966 $152,470.59 2.86%
1967 $157,176.47 3.09%
1968 $163,764.71 4.19%
1969 $172,705.88 5.46%
1970 $182,588.24 5.72%
1971 $190,588.24 4.38%
1972 $196,705.88 3.21%
1973 $208,941.18 6.22%
1974 $232,000.00 11.04%
1975 $253,176.47 9.13%
1976 $267,764.71 5.76%
1977 $285,176.47 6.50%
1978 $306,823.53 7.59%
1979 $341,647.06 11.35%
1980 $387,764.71 13.50%
1981 $427,764.71 10.32%
1982 $454,117.65 6.16%
1983 $468,705.88 3.21%
1984 $488,941.18 4.32%
1985 $506,352.94 3.56%
1986 $515,764.71 1.86%
1987 $534,588.24 3.65%
1988 $556,705.88 4.14%
1989 $583,529.41 4.82%
1990 $615,058.82 5.40%
1991 $640,941.18 4.21%
1992 $660,235.29 3.01%
1993 $680,000.00 2.99%
1994 $697,411.76 2.56%
1995 $717,176.47 2.83%
1996 $738,352.94 2.95%
1997 $755,294.12 2.29%
1998 $767,058.82 1.56%
1999 $784,000.00 2.21%
2000 $810,352.94 3.36%
2001 $833,411.76 2.85%
2002 $846,588.24 1.58%
2003 $865,882.35 2.28%
2004 $888,941.18 2.66%
2005 $919,058.82 3.39%
2006 $948,705.88 3.23%
2007 $975,727.06 2.85%
2008 $1,013,190.59 3.84%
2009 $1,009,585.88 -0.36%
2010 $1,026,145.88 1.64%
2011 $1,058,536.47 3.16%
2012 $1,080,442.35 2.07%
2013 $1,096,268.24 1.46%
2014 $1,114,051.76 1.62%
2015 $1,115,374.12 0.12%
2016 $1,129,444.71 1.26%
2017 $1,153,505.88 2.13%
2018 $1,186,061.18 2.82%*
* Compared to previous annual rate. Not final. See inflation summary for latest 12-month trailing value.

Inflation by Country

Inflation can also vary widely by country. For comparison, in the UK £40,000.00 in 1901 would be equivalent to £4,510,173.91 in 2016, an absolute change of £4,470,173.91 and a cumulative change of 11,175.43%.

Compare these numbers to the US's overall absolute change of $1,089,444.71 and total percent change of 2,723.61%.


Inflation by Spending Category

CPI is the weighted combination of many categories of spending that are tracked by the government. This chart shows the average rate of inflation for select CPI categories between 1901 and 2016.

Compare these values to the overall average of 2.95% per year:

Category Avg Inflation (%) Total Inflation (%) $40,000 in 1901 → 2016
Food 3.17 3,535.15 1,454,058.71
Shelter 4.13 10,419.55 4,207,820.93
Energy 3.76 6,869.75 2,787,898.57
Apparel 2.09 984.88 433,950.37
New vehicles 1.14 266.88 146,752.41
Used cars and trucks 0.76 139.73 95,893.74
Transportation services 3.34 4,250.08 1,740,032.12
Medical care services 5.18 33,194.94 13,317,976.65
Medical care commodities 4.38 13,728.35 5,531,338.33

It's important to note that not all categories may be tracked since 1901. This table and visualization use the earliest available data for each category.



How to Calculate Inflation Rate for $40,000, 1901 to 2016

This inflation calculator uses the following inflation rate formula:

CPI in 2016CPI in 1901
×
1901 USD value
=
2016 USD value

Then plug in historical CPI values. The U.S. CPI was 8.5 in the year 1901 and 240.007 in 2016:

240.0078.5
×
$40,000
=
$1,129,444.71

$40,000 in 1901 has the same "purchasing power" or "buying power" as $1,129,444.71 in 2016.

To get the total inflation rate for the 115 years between 1901 and 2016, we use the following formula:

CPI in 2016 - CPI in 1901CPI in 1901
×
100
=
Cumulative inflation rate (115 years)

Plugging in the values to this equation, we get:

240.007 - 8.58.5
×
100
=
2,724%

Comparison to S&P 500 Index

The average inflation rate of 2.95% has a compounding effect between 1901 and 2016. As noted above, this yearly inflation rate compounds to produce an overall price difference of 2,723.61% over 115 years.

To help put this inflation into perspective, if we had invested $40,000 in the S&P 500 index in 1901, our investment would be nominally worth approximately $1,589,093,858.07 in 2016. This is a return on investment of 3,972,634.65%, with an absolute return of $1,589,053,858.07.

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 96.46% of returns ($1,532,776,508.69) during this period. This means the inflation-adjusted real return of our $40,000 investment is $56,277,349.38.

Investment in S&P 500 Index, 1901-2016
Original Amount Final Amount Change
Nominal $40,000 $1,589,093,858.07 3,972,634.65%
Real
Inflation Adjusted
$40,000 $56,277,349.38 140,693.37%


News headlines from 1901

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

  • The funeral of Queen Victoria is held in St. George's Chapel
  • Vincent Van Gough’s paintings cause a sensation during a Paris exhibit. He had died 10 years prior.
  • Australia elects its first ever Prime Minister, Edmund Barton.
  • President William McKinley is assassinated by Leon Czolgosz at the Pan-Am Exposition in New York.

Data Source & Citation

Raw data for these calculations comes from the Bureau of Labor Statistics' (CPI), established in 1913. Inflation data from 1665 to 1912 is sourced from a historical study conducted by political science professor Robert Sahr at Oregon State University.

You may use the following MLA citation for this page: “$40,000 in 1901 → 2016 | Inflation Calculator.” U.S. Official Inflation Data, Alioth Finance, 16 Dec. 2018, https://www.officialdata.org/1901-dollars-in-2016?amount=40000.

in2013dollars.com is a reference website maintained by the Official Data Foundation.


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