What is a dollar worth?
The Consumer Price Index (CPI) is the ratio of the value of a basket of goods in the current year to the value of that same basket of goods in an earlier year. It measures the average level of prices of the goods and services typically consumed by an urban American family. Parkin, 1990
Bureau of Labor Statistics  regional and commodity/service group indexes
How the CPI is used to make these calculations
Directions: Enter years as 4 digits (eg 1998).
Enter dollar amount without commas or $ sign in box on first line. Click Calculate button to compute dollar amount shown on second line.
Notes:
 Limited to years from 1913 to
1998.
 Data from consumer price
indexes for all major expenditure class items.
 Base year is chained;
19821984 = 100
 The calculator does not work well in Windows 3.x or earlier Windows releases.
 JavaScriptenabled browsers only; Netscape version 2.0 or higher provides the best results.
How the CPI is used to make these calculations.
 What would an item or service purchased in 1998 be worth in 19?? dollars?
Example: 
The CPI is used to calculate how prices have changed over the years. Let's say you have $7 in your pocket to purchase some goods and services today. How much money would you have needed in 1950 to buy the same amount of goods and services? 

The CPI for 1950 = 24.1
The CPI for 1998 = 162.9 (estimate based on the first 4 months of 1998)
Use the following formula to compute the calculation:
1950 Price = 1998 Price * (1950 CPI / 1998 CPI)
$7.00 x 24.1 / 162.9 = $1.03

 What would an item or service purchased in 19?? be worth in 1998 dollars?
Example: 
Let's say your parents told you that in 1950 a movie cost 25 cents. How could you tell if movies have increased in price faster or slower than most goods and services? To convert that price into today's dollars, use the CPI. 

The CPI for 1950 = 24.1
The CPI for 1998 = 162.9 (estimate based on the first 4 months of 1998)
A movie in 1950 = $0.25
Use the following formula to compute the calculation:
1998 Price = 1950 Price * (1998 CPI / 1950 CPI)
$0.25 x 162.9 / 24.1 = $1.69
A full price movie at a Minneapolis theater costs between $5.00 and $7.00. Looks like movies have increased in price faster than most other goods and services. 
Source: Federal Reserve Bank of Minneapolis. Used with permission.
