View $40 in 1985 → **2021**

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$40 in 1985 is equivalent in purchasing power to about $93.39 in 2018, an increase of $53.39 over 33 years. The dollar had an average inflation rate of 2.60% per year between 1985 and 2018, producing a cumulative price increase of 133.49%.

This means that prices in 2018 are 2.33 times higher than average prices since 1985, according to the Bureau of Labor Statistics consumer price index.

The 1985 inflation rate was 3.56%. The inflation rate in 2018 was 2.49%. The 2018 inflation rate is lower compared to the average inflation rate of 2.88% per year between 2018 and 2021.

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Cumulative price change | 133.49% |

Average inflation rate | 2.60% |

Converted amount ($40 base) | $93.39 |

Price difference ($40 base) | $53.39 |

CPI in 1985 | 107.600 |

CPI in 2018 | 251.230 |

Inflation in 1985 | 3.56% |

Inflation in 2018 | 2.49% |

$40 in 1985 | $93.39 in 2018 |

This chart shows a calculation of buying power equivalence for $40 in 1985 (price index tracking began in 1635).

For example, if you started with $40, you would need to end with $93.39 in order to "adjust" for inflation (sometimes refered to as "beating inflation").

When $40 is equivalent to $93.39 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 1985 dollars, the chart below shows how $40 is worth less over 33 years.

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:

This conversion table shows various other 1985 amounts in 2018 dollars, based on the 133.49% change in prices:

Initial value | Equivalent value |
---|---|

$1 dollar in 1985 | $2.33 dollars in 2018 |

$5 dollars in 1985 | $11.67 dollars in 2018 |

$10 dollars in 1985 | $23.35 dollars in 2018 |

$50 dollars in 1985 | $116.74 dollars in 2018 |

$100 dollars in 1985 | $233.49 dollars in 2018 |

$500 dollars in 1985 | $1,167.43 dollars in 2018 |

$1,000 dollars in 1985 | $2,334.85 dollars in 2018 |

$5,000 dollars in 1985 | $11,674.26 dollars in 2018 |

$10,000 dollars in 1985 | $23,348.51 dollars in 2018 |

$50,000 dollars in 1985 | $116,742.57 dollars in 2018 |

$100,000 dollars in 1985 | $233,485.13 dollars in 2018 |

$500,000 dollars in 1985 | $1,167,425.65 dollars in 2018 |

$1,000,000 dollars in 1985 | $2,334,851.30 dollars in 2018 |

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 1985 to 2018 (figures shown are purchasing power equivalents of $40):

**San Diego, California**: 3.58% average rate, $40 → $127.82, cumulative change of 219.55%**San Francisco, California**: 2.98% average rate, $40 → $105.47, cumulative change of 163.68%**Seattle, Washington**: 2.90% average rate, $40 → $102.67, cumulative change of 156.67%**Boston, Massachusetts**: 2.85% average rate, $40 → $100.97, cumulative change of 152.43%**New York**: 2.84% average rate, $40 → $100.69, cumulative change of 151.72%**Miami-Fort Lauderdale, Florida**: 2.81% average rate, $40 → $99.69, cumulative change of 149.21%**Denver, Colorado**: 2.75% average rate, $40 → $97.84, cumulative change of 144.59%**Philadelphia, Pennsylvania**: 2.57% average rate, $40 → $92.54, cumulative change of 131.35%**Minneapolis-St Paul, Minnesota**: 2.54% average rate, $40 → $91.58, cumulative change of 128.94%**Chicago, Illinois**: 2.43% average rate, $40 → $88.28, cumulative change of 120.69%**Atlanta, Georgia**: 2.41% average rate, $40 → $87.73, cumulative change of 119.34%**Detroit, Michigan**: 2.38% average rate, $40 → $86.91, cumulative change of 117.28%**Houston, Texas**: 2.35% average rate, $40 → $86.22, cumulative change of 115.54%**Dallas-Fort Worth, Texas**: 2.35% average rate, $40 → $86.15, cumulative change of 115.37%**St Louis, Missouri**: 2.33% average rate, $40 → $85.47, cumulative change of 113.68%

San Diego, California experienced the highest rate of inflation during the 33 years between 1985 and 2018 (3.58%).

St Louis, Missouri experienced the lowest rate of inflation during the 33 years between 1985 and 2018 (2.33%).

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

Inflation can also vary widely by country. For comparison, in the UK £40.00 in 1985 would be equivalent to £118.32 in 2018, an absolute change of £78.32 and a cumulative change of 195.80%.

In Canada, CA$40.00 in 1985 would be equivalent to CA$81.62 in 2018, an absolute change of CA$41.62 and a cumulative change of 104.06%.

Compare these numbers to the US's overall absolute change of $53.39 and total percent change of 133.49%.

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 1985 and 2018.

Compare these values to the overall average of 2.60% per year:

Category | Avg Inflation (%) | Total Inflation (%) | $40 in 1985 → 2018 |
---|---|---|---|

Food and beverages | 2.69 | 139.96 | 95.98 |

Housing | 2.69 | 139.98 | 95.99 |

Apparel | 0.54 | 19.64 | 47.86 |

Transportation | 2.09 | 97.89 | 79.16 |

Medical care | 4.50 | 327.00 | 170.80 |

Recreation | 1.09 | 42.96 | 57.18 |

Education and communication | 1.89 | 85.76 | 74.30 |

Other goods and services | 4.18 | 285.74 | 154.30 |

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 1985. This table and charts use the earliest available data for each category.

Our calculations use the following inflation rate formula to calculate the change in value between 1985 and 2018:

CPI in 2018
CPI in 1985

×

1985 USD value

=

2018 USD value

Then plug in historical CPI values. The U.S. CPI was 107.6 in the year 1985 and 251.23 in 2018:

251.23107.6

×

$40

=

$40 in 1985 has the same "purchasing power" or "buying power" as $93.39 in 2018.

To get the total inflation rate for the 33 years between 1985 and 2018, we use the following formula:

CPI in 2018 - CPI in 1985CPI in 1985

×

100

=

Plugging in the values to this equation, we get:

251.23 - 107.6107.6

×

100

=

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 2.64% per year between 1985 and 2018 (vs all-CPI inflation of 2.60%), for an inflation total of 136.05%.

When using the core inflation measurement, $40 in 1985 is equivalent in buying power to $94.42 in 2018, a difference of $54.42. Recall that for All Items, the converted amount is $93.39 with a difference of $53.39.

In 1985, core inflation was 4.37%.

The average inflation rate of 2.60% has a compounding effect between 1985 and 2018. As noted above, this yearly inflation rate compounds to produce an overall price difference of 133.49% over 33 years.

To help put this inflation into perspective, if we had invested $40 in the S&P 500 index in 1985, our investment would be * nominally* worth approximately $1,311.91 in 2018. This is a return on investment of 3,179.77%, with an absolute return of $1,271.91 on top of the original $40.

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 57.17% of returns ($750.03) during this period. This means the inflation-adjusted * real* return of our $40 investment is $521.88. You may also want to account for capital gains tax, which would take your real return down to around $444 for most people.

Original Amount | Final Amount | Change | |
---|---|---|---|

Nominal |
$40 | $1,311.91 | 3,179.77% |

RealInflation Adjusted |
$40 | $561.88 | 1,304.70% |

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 1985 to latest available data for 2018 using average monthly close price.

For more details on the S&P 500 between 1985 and 2018, see the stock market returns calculator.

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

- Mikhail Gorbachev replaces Konstantin Chernenko as leader of the Soviet Union.
- Earthquake with a magnitude of 8.1 rocks Mexico City and kills 10,000 people, leaving over 250,000 homeless.
- Mikhail Gorbachev (leader of the Soviet Union) and Ronald Reagan (President of the United States) meet for the first time.
- Ernie Wise makes the first mobile phone call in the UK.

Raw data for these calculations comes from the Bureau of Labor Statistics' Consumer Price Index (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 in 1985 → 2018 | Inflation Calculator.” Official Inflation Data, Alioth Finance, 26 Sep. 2021, https://www.officialdata.org/1985-dollars-in-2018?amount=40.

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

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

Cumulative price change | 133.49% |

Average inflation rate | 2.60% |

Converted amount ($40 base) | $93.39 |

Price difference ($40 base) | $53.39 |

CPI in 1985 | 107.600 |

CPI in 2018 | 251.230 |

Inflation in 1985 | 3.56% |

Inflation in 2018 | 2.49% |

$40 in 1985 | $93.39 in 2018 |