$100 in 1989
$1,933.53 in 2023
The inflation rate in Mexico between 1989 and today has been 1,833.53%, which translates into a total increase of $1,833.53. This means that 100 pesos in 1989 are equivalent to 1,933.53 pesos in 2023. In other words, the purchasing power of $100 in 1989 equals $1,933.53 today. The average annual inflation rate between these periods has been 9.1%.
Inflation timeline in Mexico (1989 - 2023)
The following chart depicts the equivalence of $100 due to compound inflation and CPI changes. All values are equivalent in terms of purchasing power, which means that for each year the same goods or services could be bought with the indicated amount of money.
All calculations are performed in the local currency (MXN) and using 6 decimal digits. Results show only up to 2 decimal digits to favour readability. Inflation data is provided by governments and international institutions on a monthly basis. Today's values were extrapolated from the latest 12-month rolling average official data.
The following table contains relevant indicators:
| Indicator | Value |
|---|---|
| Cumulative inflation 1989-2022 | 1,698.23% |
| Cumulative inflation 1989-today | 1,833.53% |
| Avg. Annual inflation 1989-2022 | 9.15% |
| CPI 1989 | 7.77 |
| CPI 2022 | 139.76 |
| CPI 2023-11 (latest official data) | 149.96 |
| CPI today | 150.28 |
How to calculate today's value of money after inflation?
There are several ways to calculate the time value of money. Depending on the data available, results can be obtained by using the Consumer Price Index (CPI) formula or the compound interest formula.
Using the CPI formula
When we have both the start and end years, we can use the following formula:
Valuet =Value0 ×
CPIt/CPI0
To obtain the values equivalent in buying power between 1989 and 2022, use the corresponding CPI values:
Value2022
=Value1989 ×
CPI2022/CPI1989
=$ 100 ×
139.76/7.77
≈$1,798.23
To obtain the equivalent value today (present value), plug in the CPI for today, which is estimated as 150.28:
Valuetoday
=Value1989 ×
CPItoday/CPI1989
=$ 100 ×
150.28/7.77
≈$1,933.53
Alternative: Using the compound interest formula
Given that money changes with time as a result of an inflation rate that acts as compound interest, we can use the following formula: FV = PV × (1 + i)n, where:
- FV: Future Value
- PV: Present Value
- i: Interest rate (inflation)
- n: Number of times the interest is compounded (i.e. # of years)
In this case, the future value represents the final amount obtained after applying the inflation rate to our initial value. In other words, it indicates how much are $100 worth today. There are 33 years between 1989 and 2022 and the average inflation rate was 9.1505%. Therefore, we can resolve the formula like this:
Value2022
=PV × (1 + i)n
=$100 × (1 + 0.091505)33
≈$1,798.23
Mexico inflation - Conversion table
| Initial Value | Equivalent value | |
|---|---|---|
| $1 peso in 1989 | → | $17.98 pesos in 2022 |
| $5 pesos in 1989 | → | $89.91 pesos in 2022 |
| $10 pesos in 1989 | → | $179.82 pesos in 2022 |
| $50 pesos in 1989 | → | $899.11 pesos in 2022 |
| $100 pesos in 1989 | → | $1,798.23 pesos in 2022 |
| $500 pesos in 1989 | → | $8,991.14 pesos in 2022 |
| $1,000 pesos in 1989 | → | $17,982.28 pesos in 2022 |
| $5,000 pesos in 1989 | → | $89,911.41 pesos in 2022 |
| $10,000 pesos in 1989 | → | $179,822.83 pesos in 2022 |
| $50,000 pesos in 1989 | → | $899,114.14 pesos in 2022 |
| $100,000 pesos in 1989 | → | $1,798,228.27 pesos in 2022 |
| $500,000 pesos in 1989 | → | $8,991,141.36 pesos in 2022 |
| $1,000,000 pesos in 1989 | → | $17,982,282.73 pesos in 2022 |
I am a financial expert with a deep understanding of economic concepts, particularly inflation and its impact on purchasing power. My expertise is grounded in extensive research, analysis of economic trends, and a comprehensive understanding of financial instruments. I have successfully applied these skills to interpret and communicate complex financial data, as evidenced by my ability to break down intricate concepts for better understanding.
Now, let's delve into the information presented in the article about the inflation rate in Mexico between 1989 and 2023, along with the related concepts:
-
Inflation Rate in Mexico (1989-2023):
- The inflation rate in Mexico between 1989 and 2023 is stated as 1,833.53%. This represents the cumulative increase in prices over this period.
-
Equivalent Value Calculation:
-
The article provides two methods for calculating the equivalent value of money over time due to inflation: using the Consumer Price Index (CPI) formula and the compound interest formula.
-
CPI Formula:
- The formula for obtaining the value equivalent in buying power between 1989 and 2022 is: [ \text{Value}{2022} = \text{Value}{1989} \times \frac{\text{CPI}{2022}}{\text{CPI}{1989}} ]
- The calculation for $100 is shown as: [ \text{Value}_{2022} \approx \$100 \times \frac{139.76}{7.77} \approx \$1,798.23 ]
- To obtain the equivalent value in 2023: [ \text{Value}_{\text{today}} \approx \$100 \times \frac{150.28}{7.77} \approx \$1,933.53 ]
-
Compound Interest Formula:
- The formula is given by: [ \text{FV} = \text{PV} \times (1 + i)^n ]
- Using this formula, the value in 2022 is calculated as: [ \text{Value}_{2022} \approx \$100 \times (1 + 0.091505)^{33} \approx \$1,798.23 ]
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Inflation Indicators:
- The article presents relevant indicators, including cumulative inflation rates, average annual inflation rate, and Consumer Price Index (CPI) values for the years 1989, 2022, and the latest data for 2023.
-
Conversion Table:
- A conversion table illustrates the equivalent value of various initial amounts in 1989 in pesos for the year 2022, highlighting the significant impact of inflation over the 33-year period.
This comprehensive information provides a detailed understanding of how inflation has affected the value of money in Mexico, demonstrating the intricate calculations involved in assessing purchasing power over time.
