$20 in 2004 is worth $27.40 in 2020

Buying power of $20 in 2004

This chart shows a calculation of buying power equivalence for $20 in 2004 (price index tracking began in 1635).

For example, if you started with $20, you would need to end with $27.40 in order to "adjust" for inflation (sometimes refered to as "beating inflation").

When $20 is equivalent to $27.40 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 2004 dollars, the chart below shows how $20 is worth less over 16 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 2004 amounts in 2020 dollars, based on the 37.01% change in prices:

Inflation by City

Inflation can vary widely by city, even within the United States. Here's how some cities fared in 2004 to 2020 (figures shown are purchasing power equivalents of $20):

• San Diego, California: 3.14% average rate, $20 → $32.80, cumulative change of 64.00%
• San Francisco, California: 2.61% average rate, $20 → $30.20, cumulative change of 51.01%
• Miami-Fort Lauderdale, Florida: 2.43% average rate, $20 → $29.38, cumulative change of 46.88%
• Denver, Colorado: 2.37% average rate, $20 → $29.11, cumulative change of 45.57%
• Seattle, Washington: 2.36% average rate, $20 → $29.03, cumulative change of 45.17%
• Tampa, Florida: 2.32% average rate, $20 → $28.87, cumulative change of 44.35%
• Phoenix, Arizona: 2.06% average rate, $20 → $27.70, cumulative change of 38.52%
• New York: 2.04% average rate, $20 → $27.63, cumulative change of 38.17%
• Boston, Massachusetts: 1.93% average rate, $20 → $27.14, cumulative change of 35.69%
• Houston, Texas: 1.91% average rate, $20 → $27.06, cumulative change of 35.30%
• Atlanta, Georgia: 1.88% average rate, $20 → $26.94, cumulative change of 34.69%
• Minneapolis-St Paul, Minnesota: 1.88% average rate, $20 → $26.93, cumulative change of 34.64%
• Dallas-Fort Worth, Texas: 1.84% average rate, $20 → $26.78, cumulative change of 33.89%
• Philadelphia, Pennsylvania: 1.75% average rate, $20 → $26.38, cumulative change of 31.92%
• Chicago, Illinois: 1.62% average rate, $20 → $25.86, cumulative change of 29.28%
• St Louis, Missouri: 1.61% average rate, $20 → $25.83, cumulative change of 29.14%
• Detroit, Michigan: 1.57% average rate, $20 → $25.65, cumulative change of 28.25%

San Diego, California experienced the highest rate of inflation during the 16 years between 2004 and 2020 (3.14%).

Detroit, Michigan experienced the lowest rate of inflation during the 16 years between 2004 and 2020 (1.57%).

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 £20.00 in 2004 would be equivalent to £31.28 in 2020, an absolute change of £11.28 and a cumulative change of 56.40%.

In Canada, CA$20.00 in 2004 would be equivalent to CA$26.17 in 2020, an absolute change of CA$6.17 and a cumulative change of 30.86%.

Compare these numbers to the US's overall absolute change of $7.40 and total percent change of 37.01%.

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.

Between 2004 and 2020:

• Gas prices increased from $1.59 per gallon to $2.57
• Bread prices increased from $0.95 per loaf to $1.35
• Egg prices increased from $1.57 per carton to $1.46
• Chicken prices increased from $1.06 per per 1 lb of whole chicken to $1.41
• Electricity prices increased from $0.09 per KwH to $0.13

This chart shows the average rate of inflation for select CPI categories between 2004 and 2020.

Compare these values to the overall average of 1.99% per year:

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 2004. This table and charts use the earliest available data for each category.

How to calculate inflation rate for $20, 2004 to 2020

Our calculations use the following inflation rate formula to calculate the change in value between 2004 and 2020:

Then plug in historical CPI values. The U.S. CPI was 188.9 in the year 2004 and 258.81166666667 in 2020:

$20 in 2004 has the same "purchasing power" or "buying power" as $27.40 in 2020.

To get the total inflation rate for the 16 years between 2004 and 2020, we use the following formula:

Plugging in the values to this equation, we get:

Alternate Measurements of Inflation

There are multiple ways to measure inflation. Published rates of inflation will vary depending on methodology. The Consumer Price Index, used above, is the most common standard used globally.

Alternative measurements are sometimes used based on context and economic/political circumstances. Below are a few examples of alternative measurements.

Personal Consumption Expenditures (PCE) Inflation

The PCE Price Index is the U.S. Federal Reserve's preferred measure of inflation, compiled by the Bureau of Economic Analysis. It measures the change in prices of goods and services purchased by consumers.

The PCE Price Index changed by 1.71% per year on average between 2004 and 2020. The total PCE inflation between these dates was 31.08%. In 2004, PCE inflation was 2.48%.

This means that the PCE Index equates $20 in 2004 with $26.22 in 2020, a difference of $6.22. Compare this to the standard CPI measurement, which equates $20 with $27.40. The PCE measured -5.93% inflation compared to standard CPI.

For more information on the difference between PCE and CPI, see this analysis provided by the Bureau of Labor Statistics.

Core Inflation

Also of note is the Core CPI, which uses the standard CPI but omits the more volatile categories of food and energy.

Core inflation averaged 1.95% per year between 2004 and 2020 (vs all-CPI inflation of 1.99%), for an inflation total of 36.15%. In 2004, core inflation was 1.76%.

When using the core inflation measurement, $20 in 2004 is equivalent in buying power to $27.23 in 2020, a difference of $7.23. Recall that the converted amount is $27.40 when all items including food and energy are measured.

Chained Inflation

Chained CPI is an alternative measurement that takes into account how consumers adjust spending for similar items. Chained inflation averaged 1.73% per year between 2004 and 2020, a total inflation amount of 31.67%.

According to the Chained CPI measurement, $20 in 2004 is equal in buying power to $26.33 in 2020, a difference of $6.33 (versus a converted amount of $27.40/change of $7.40 for All Items).

In 2004, chained inflation was 2.51%.

Comparison to S&P 500 Index

The average inflation rate of 1.99% has a compounding effect between 2004 and 2020. As noted above, this yearly inflation rate compounds to produce an overall price difference of 37.01% over 16 years.

To help put this inflation into perspective, if we had invested $20 in the S&P 500 index in 2004, our investment would be nominally worth approximately $93.77 in 2020. This is a return on investment of 368.85%, with an absolute return of $73.77 on top of the original $20.

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 27.01% of returns ($25.33) during this period. This means the inflation-adjusted real return of our $20 investment is $48.44. You may also want to account for capital gains tax, which would take your real return down to around $41 for most people.

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 2004 to latest available data for 2020 using average monthly close price.

For more details on the S&P 500 between 2004 and 2020, see the stock market returns calculator.

Data source & citation

Raw data for these calculations comes from the Bureau of Labor Statistics' Consumer Price Index (CPI), established in 1913. Price index data from 1774 to 1912 is sourced from a historical study conducted by political science professor Robert Sahr at Oregon State University and from the American Antiquarian Society. Price index data from 1634 to 1773 is from the American Antiquarian Society, using British pound equivalents.

» Read more about inflation and investment.