# \$1 in 1985 is worth \$1.13 in 1988

\$

## Value of \$1 from 1985 to 1988

According to Statistics Canada consumer price index, prices in 1988 are 12.79% higher than average prices since 1985. The Canadian dollar experienced an average inflation rate of 4.09% per year during this period, causing the real value of a dollar to decrease.

In other words, \$1 in 1985 is equivalent in purchasing power to about \$1.13 in 1988, a difference of \$0.13 over 3 years.

The 1985 inflation rate was 4.40%. The inflation rate in 1988 was 3.88%. The 1988 inflation rate is higher compared to the average inflation rate of 2.00% per year between 1988 and 2020.

 Cumulative price change 12.79% Average inflation rate 4.09% Converted amount (\$1 base) \$1.13 Price difference (\$1 base) \$0.13 CPI in 1985 64.100 CPI in 1988 72.300 Inflation in 1985 4.40% Inflation in 1988 3.88%

## Buying power of \$1 in 1985

This chart shows a calculation of buying power equivalence for \$1 in 1985 (price index tracking began in 1914).

For example, if you started with \$1, you would need to end with \$1.13 in order to "adjust" for inflation (sometimes refered to as "beating inflation").

When \$1 is equivalent to \$1.13 over time, that means that the "real value" of a single Canadian 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 \$1 is worth less over 3 years.

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

Dollar inflation: 1985-1988
Year Dollar Value Inflation Rate
1985 \$1.00 4.40%
1986 \$1.04 4.21%
1987 \$1.09 4.19%
1988 \$1.13 3.88%
1989 \$1.19 5.26%
1990 \$1.25 4.99%
1991 \$1.29 3.75%
1992 \$1.32 2.17%
1993 \$1.34 1.65%
1994 \$1.35 0.23%
1995 \$1.37 1.74%
1996 \$1.40 2.16%
1997 \$1.41 0.78%
1998 \$1.42 1.00%
1999 \$1.46 2.63%
2000 \$1.51 3.20%
2001 \$1.52 0.72%
2002 \$1.58 3.80%
2003 \$1.61 2.08%
2004 \$1.64 2.13%
2005 \$1.68 2.09%
2006 \$1.71 1.67%
2007 \$1.75 2.38%
2008 \$1.77 1.16%
2009 \$1.79 1.32%
2010 \$1.83 2.35%
2011 \$1.88 2.30%
2012 \$1.89 0.83%
2013 \$1.91 1.24%
2014 \$1.94 1.47%
2015 \$1.97 1.61%
2016 \$2.00 1.50%
2017 \$2.03 1.56%
2018 \$2.04 0.31%
2019 \$2.08 1.99%
2020 \$2.13 2.25%*
* Compared to previous annual rate. Not final. See inflation summary for latest 12-month trailing value.

This conversion table shows various other 1985 amounts in 1988 dollars, based on the 12.79% change in prices:

Conversion Table: Value of a dollar in 1988
Initial value Equivalent value
\$1 dollar in 1985 \$1.13 dollars in 1988
\$5 dollars in 1985 \$5.64 dollars in 1988
\$10 dollars in 1985 \$11.28 dollars in 1988
\$50 dollars in 1985 \$56.40 dollars in 1988
\$100 dollars in 1985 \$112.79 dollars in 1988
\$500 dollars in 1985 \$563.96 dollars in 1988
\$1,000 dollars in 1985 \$1,127.93 dollars in 1988
\$5,000 dollars in 1985 \$5,639.63 dollars in 1988
\$10,000 dollars in 1985 \$11,279.25 dollars in 1988
\$50,000 dollars in 1985 \$56,396.26 dollars in 1988
\$100,000 dollars in 1985 \$112,792.51 dollars in 1988
\$500,000 dollars in 1985 \$563,962.56 dollars in 1988
\$1,000,000 dollars in 1985 \$1,127,925.12 dollars in 1988

## How to Calculate Inflation Rate for \$1, 1985 to 1988

Our calculations use the following inflation rate formula to calculate the change in value between 1985 and 1988:

CPI in 1988 CPI in 1985
×
=

Then plug in historical CPI values. The Canadian CPI was 64.1 in the year 1985 and 72.3 in 1988:

72.364.1
×
\$1
=
\$1.13

\$1 in 1985 has the same "purchasing power" or "buying power" as \$1.13 in 1988.

To get the total inflation rate for the 3 years between 1985 and 1988, we use the following formula:

CPI in 1988 - CPI in 1985CPI in 1985
×
100
=
Cumulative inflation rate (3 years)

Plugging in the values to this equation, we get:

72.3 - 64.164.1
×
100
=
13%

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.

## Data Source & Citation

Raw data for these calculations comes from the government of Canada's annual Consumer Price Index (CPI), established in 1914 and computed by Statistics Canada (StatCan).

You may use the following MLA citation for this page: “\$1 in 1985 → 1988 | Canada Inflation Calculator.” Official Inflation Data, Alioth Finance, 4 Jun. 2020, https://www.officialdata.org/canada/inflation/1985?amount=1&endYear=1988.