$40,206 in 2004 is worth$45,825.69 in 2008

$40,206 in 2004 has the same purchasing power as$45,825.69 in 2008. Over the 4 years this is a change of $5,619.69. The average inflation rate of the dollar between 2004 and 2008 was 3.19% per year. The cumulative price increase of the dollar over this time was 13.98%. The value of$40,206 from 2004 to 2008

So what does this data mean? It means that the prices in 2008 are 458.26 higher than the average prices since 2004. A dollar in 2008 can buy 87.74% of what it could buy in 2004.

We can look at the buying power equivalent for $40,206 in 2004 to see how much you would need to adjust for in order to beat inflation. For 2004 to 2008, if you started with$40,206 in 2004, you would need to have $45,825.69 in 2004 to keep up with inflation rates. So if we are saying that$40,206 is equivalent to $45,825.69 over time, you can see the core concept of inflation in action. The "real value" of a single dollar decreases over time. It will pay for fewer items at the store than it did previously. In the chart below you can see how the value of the dollar is worth less over 4 years. Value of$40,206 Over Time

In the table below we can see the value of the US Dollar over time. According to the BLS, each of these amounts are equivalent in terms of what that amount could purchase at the time.

Year Dollar Value Inflation Rate
2004 $40,206.00 2.66% 2005$41,568.19 3.39%
2006 $42,909.10 3.23% 2007$44,131.25 2.85%