3 ms·

I'm surprised $100 in 1920 translates to only $1000 today!

• pzxc 16y ago
  I'm surprised it's that much. 1000% inflation over 91 years is almost 11% per year. That's pretty serious inflation.
  • petercooper 16y ago
    11% inflation p.a. over 91 years on $100 would be $1331653. Calculation: 100 * pow(1.11, 91) - where ^ $100 to $1000 over 91 years is 2.56% inflation p.a. Calculation: pow(1000 / 100, 1 / 91) Please correct me where necessary math whizzes!
    • dandelany 16y ago
      This is correct. Average annual returns are not as simple as taking an arithmetic average of returns over the time period. This is because your first year's 2.56% return is not the same amount as your next year's - because the second year's return is 2.56% of the original capital PLUS the 2.56% you earned the year before... And so on and so forth. Hence your correct derivation of the "compound annual growth rate".