# \$20,000 in 1989 is worth \$41,998.06 today

\$

## Value of \$20,000 from 1989 to 2020

According to the Bureau of Labor Statistics consumer price index, today's prices in 2020 are 109.99% higher than average prices since 1989. The U.S. dollar experienced an average inflation rate of 2.42% per year during this period, causing the real value of a dollar to decrease.

In other words, \$20,000 in 1989 is equivalent in purchasing power to about \$41,998.06 in 2020, a difference of \$21,998.06 over 31 years.

The 1989 inflation rate was 4.82%. The current year-over-year inflation rate (2019 to 2020) is now 1.18%1. If this number holds, \$20,000 today will be equivalent in buying power to \$20,236.41 next year. The current inflation rate page gives more detail on the latest official inflation rates.

 Cumulative price change 109.99% Average inflation rate 2.42% Converted amount (\$20,000 base) \$41,998.06 Price difference (\$20,000 base) \$21,998.06 CPI in 1989 124.000 CPI in 2020 260.388 Inflation in 1989 4.82% Inflation in 2020 1.18%

USD Inflation since 1913
Annual Rate, the Bureau of Labor Statistics CPI

## Buying power of \$20,000 in 1989

This chart shows a calculation of buying power equivalence for \$20,000 in 1989 (price index tracking began in 1635).

For example, if you started with \$20,000, you would need to end with \$41,998.06 in order to "adjust" for inflation (sometimes refered to as "beating inflation").

When \$20,000 is equivalent to \$41,998.06 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 1989 dollars, the chart below shows how \$20,000 is worth less over 31 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:

Dollar inflation: 1989-2020
Year Dollar Value Inflation Rate
1989 \$20,000.00 4.82%
1990 \$21,080.65 5.40%
1991 \$21,967.74 4.21%
1992 \$22,629.03 3.01%
1993 \$23,306.45 2.99%
1994 \$23,903.23 2.56%
1995 \$24,580.65 2.83%
1996 \$25,306.45 2.95%
1997 \$25,887.10 2.29%
1998 \$26,290.32 1.56%
1999 \$26,870.97 2.21%
2000 \$27,774.19 3.36%
2001 \$28,564.52 2.85%
2002 \$29,016.13 1.58%
2003 \$29,677.42 2.28%
2004 \$30,467.74 2.66%
2005 \$31,500.00 3.39%
2006 \$32,516.13 3.23%
2007 \$33,442.26 2.85%
2008 \$34,726.29 3.84%
2009 \$34,602.74 -0.36%
2010 \$35,170.32 1.64%
2011 \$36,280.48 3.16%
2012 \$37,031.29 2.07%
2013 \$37,573.71 1.46%
2014 \$38,183.23 1.62%
2015 \$38,228.55 0.12%
2016 \$38,710.81 1.26%
2017 \$39,535.48 2.13%
2018 \$40,520.97 2.49%
2019 \$41,235.08 1.76%
2020 \$41,998.06 1.85%*
* Compared to previous annual rate. Not final. See inflation summary for latest 12-month trailing value.
Click to show 25 more rows

This conversion table shows various other 1989 amounts in today's dollars, based on the 109.99% change in prices:

Conversion Table: Value of a dollar today
Initial value Equivalent value
\$1 dollar in 1989 \$2.10 dollars today
\$5 dollars in 1989 \$10.50 dollars today
\$10 dollars in 1989 \$21.00 dollars today
\$50 dollars in 1989 \$105.00 dollars today
\$100 dollars in 1989 \$209.99 dollars today
\$500 dollars in 1989 \$1,049.95 dollars today
\$1,000 dollars in 1989 \$2,099.90 dollars today
\$5,000 dollars in 1989 \$10,499.52 dollars today
\$10,000 dollars in 1989 \$20,999.03 dollars today
\$50,000 dollars in 1989 \$104,995.16 dollars today
\$100,000 dollars in 1989 \$209,990.32 dollars today
\$500,000 dollars in 1989 \$1,049,951.61 dollars today
\$1,000,000 dollars in 1989 \$2,099,903.23 dollars today

## Inflation by City

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 1989 to 2020 (figures shown are purchasing power equivalents of \$20,000):

San Diego, California experienced the highest rate of inflation during the 31 years between 1989 and 2020 (3.44%).

St Louis, Missouri experienced the lowest rate of inflation during the 31 years between 1989 and 2020 (2.09%).

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 £20,000.00 in 1989 would be equivalent to £50,087.72 in 2020, an absolute change of £30,087.72 and a cumulative change of 150.44%.

In Canada, CA\$20,000.00 in 1989 would be equivalent to CA\$35,847.57 in 2020, an absolute change of CA\$15,847.57 and a cumulative change of 79.24%.

Compare these numbers to the US's overall absolute change of \$21,998.06 and total percent change of 109.99%.

## 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 1989 and 2020.

Compare these values to the overall average of 2.42% per year:

Category Avg Inflation (%) Total Inflation (%) \$20,000 in 1989 → 2020
Food and beverages 2.47 113.03 42,606.14
Housing 2.58 120.58 44,115.30
Apparel 0.00 0.01 20,001.04
Transportation 1.84 76.13 35,225.64
Medical care 4.10 247.48 69,495.18
Recreation 1.10 40.37 28,074.08
Education and communication 1.84 76.14 35,228.01
Other goods and services 3.75 212.74 62,548.55

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 1989. This table and charts use the earliest available data for each category.

## How to Calculate Inflation Rate for \$20,000 since 1989

Our calculations use the following inflation rate formula to calculate the change in value between 1989 and today:

CPI today CPI in 1989
×
1989 USD value
=
Today's value

Then plug in historical CPI values. The U.S. CPI was 124 in the year 1989 and 260.388 in 2020:

260.388124
×
\$20,000
=
\$41,998.06

\$20,000 in 1989 has the same "purchasing power" or "buying power" as \$41,998.06 in 2020.

To get the total inflation rate for the 31 years between 1989 and 2020, we use the following formula:

CPI in 2020 - CPI in 1989CPI in 1989
×
100
=
Cumulative inflation rate (31 years)

Plugging in the values to this equation, we get:

260.388 - 124124
×
100
=
110%

## 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 2.38% per year between 1989 and 2020 (vs all-CPI inflation of 2.42%), for an inflation total of 107.29%.

When using the core inflation measurement, \$20,000 in 1989 is equivalent in buying power to \$41,458.81 in 2020, a difference of \$21,458.81. Recall that for All Items, the converted amount is \$41,998.06 with a difference of \$21,998.06.

In 1989, core inflation was 4.51%.

## Comparison to S&P 500 Index

The average inflation rate of 2.42% has a compounding effect between 1989 and 2020. As noted above, this yearly inflation rate compounds to produce an overall price difference of 109.99% over 31 years.

To help put this inflation into perspective, if we had invested \$20,000 in the S&P 500 index in 1989, our investment would be nominally worth approximately \$471,536.97 in 2020. This is a return on investment of 2,257.68%, with an absolute return of \$451,536.97 on top of the original \$20,000.

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 52.38% of returns (\$246,985.21) during this period. This means the inflation-adjusted real return of our \$20,000 investment is \$204,551.76. You may also want to account for capital gains tax, which would take your real return down to around \$173,869 for most people.

Investment in S&P 500 Index, 1989-2020
Original Amount Final Amount Change
Nominal \$20,000 \$471,536.97 2,257.68%
Real
\$20,000 \$224,551.76 1,022.76%

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 1989 to latest available data for 2020 using average monthly close price.

For more details on the S&P 500 between 1989 and 2020, see the stock market returns calculator.

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

• Chinese troops kill thousands of students protesting at Tiananmen Square.
• The first (partially) free elections take place in Poland, bringing democracy to Eastern Europe for the first time in 40 years. (Won by the Solidarity Party)
• The demolition of the Berlin Wall begins.
• Presidents George H. W. Bush and Mikhail Gorbachev declare that the Cold War has ended.

## 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: “\$20,000 in 1989 → 2020 | Inflation Calculator.” Official Inflation Data, Alioth Finance, 26 Nov. 2020, https://www.officialdata.org/1989-dollars-in-2020?amount=20000.

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.