L was looking at some jewellery today, and an item I bought n Italy in 1972 for 1,800 Lire.
How would I calculate the present value of that item in current currency?
[OP]
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L was looking at some jewellery today, and an item I bought n Italy in 1972 for 1,800 Lire.
How would I calculate the present value of that item in current currency?
Young enough to remember doing it;
Old enough to wish I could do it again.
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https://www.inflationtool.com/euro-i...equency=yearly
I used this inflation calculator and got 34,375 lire. Not sure how this inflation calculator workd with jewelry value though.
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It's only worth what someone is willing to buy it for so you need to look for what similar items are selling for now. Alternately you could pay to have it have it appraised. Calculating today's value for 1800 Lira from 1972 is meaningless.
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In 1970 the exchange rate was 634 Italian Lira per dollar. So using the CPI inflation calculator that ~$3 then comes out to about $22 today.
It seems to me that being able to compare relative values over time is actually an extremely interesting and useful thing to be able to do. Without making such conversions it's really hard to understand how people have valued things over time. It's also a relatively hard problem. My favorite method for longer historical comparisons is to translate a price into the number of hours of work from a skilled carpenter it would take to purchase it. Evidence suggests that the value of that work has remained pretty constant over thousands of years-- people have needed carpenters for a long time, and still do.Translating the price of a horse, an acre of land, or a sword into carpenter hours makes it possible to think about how things were values historically.
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How many times in the past did the banana-republic Italian govco caused the exchange rate to crater? Lira to USD pre-1999? What about Euro to USD post-1998? Or rather the "Euro-based pseudo" ITL? 1972: 583 ITL per $1 USD / 2022: 1,839 Pseudo-ITL per $1 USDOriginally Posted by roger wiegand
Maybe that $3 number is underwater today.
There are a lot of moving parts in this question beyond the straight-forward inflation calculator.
But it is an interesting topic.
When I started woodworking, I didn't know squat. I have progressed in 30 years - now I do know squat.
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What Kent says. I’ve always found it interesting that a foreign investments profit or loss depends on the difference in exchange rates at the time of purchase and sell.
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Here are the steps on how to calculate the present value of the item in current currency:
Convert the 1,800 Lire to US Dollars using the exchange rate for 1972. The exchange rate for 1972 was 0.00036 USD/ITL. So, 1,800 Lire is equivalent to 0.648 USD.
Calculate the inflation rate between 1972 and today. The average inflation rate in the US between 1972 and 2023 is 3.22%. So, the value of 1 USD in 1972 is equivalent to 6.44 USD in 2023.
Multiply the value of 1,800 Lire in USD by the inflation rate to get the present value of the item. In this case, the present value is 40.76 USD.
Last edited by Lawrence Duckworth; 06-20-2023 at 11:02 AM.
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