Value of £400 40 years later

R

rmelly

Guest
Trying to roughly figure out how much £400 from 40 years ago would be worth in €'s today.

Is this the correct approach:

Figures from: [broken link removed]

1970: €3.62
2006: €43.37

For 36 years, divide €43.37 by €3.62 and multiply by 400, then divide by .787 (for Euro conversion of the 400 figure).

The rough total for 36 years is approx €6000.

Is this correct, or should I be looking at the CPI figures?
 
I think so but am not 100% sure. I get €6,080 or thereabouts too.

I think the CPI figures are probably the best estimate of the purchasing power of money over time.
 
thanks - I'll try the CPI figures later to see what it comes up with.
 
Would any one know what £400 would have bought you 40 years ago? or even a fraction of £400?
 
askU said:
Would any one know what £400 would have bought you 40 years ago? or even a fraction of £400?
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Not sure you can approach it like that.

A four-bed semi in Swords cost about £1600 in 1972. So it has increased to EUR 100,000

A 286 PC cost about £2000 in 1985. So it has decreased to EUR 200.

Clubman's beer inflation index is probably as accurate as it gets - I remember doing similar comparisons at college on a history course to try and work out relative purchasing power!
 
HighFlier said:
Can I have the address of that 4 bed semi I'd like to put in an offer!
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That would be £1600/£400 = about a quarter of the house price, the 100,000 is the equivalent quarter of the price (yes, probably still an understatement, but a nice round number!).
 
That's effectively what the original poster did. The way I'd do it (same result) is...

Convert to €: IR£400 / 0.787564 = €507.90
Normalise back to base units: €507.90 / 3.62 = €140.30
Calculate 2006 equivalent value: €140.30 x 43.37 = €6,084.81
 
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