How do you convert US dollar prices in 1989 to 2006 dollars?

The Consumer Price Index (CPI) is the ratio of the value of a basket of goods in the current year to the value of that same basket of goods in an earlier year. It measures the average level of prices of the goods and services typically consumed by an urban American family. Parkin, 1990 Bureau of Labor Statistics -- regional and commodity/service group indexes

How the CPI is used to make these calculations Directions: Enter years as 4 digits (eg 1998). Enter dollar amount without commas or $ sign in box on first line. Click Calculate button to compute dollar amount shown on second line. If in (year) I bought goods or services for $,

in (year) the same goods or services would cost $ Notes:

* Limited to years from 1913 to 1998. * Data from consumer price indexes for all major expenditure class items. * Base year is chained; 1982-1984 = 100 * The calculator does not work well in Windows 3.x or earlier Windows releases. * JavaScript-enabled browsers only; Netscape version 2.0 or higher provides the best results.

* What would an item or service purchased in 1998 be worth in 19?? dollars? Example: The CPI is used to calculate how prices have changed over the years. Let's say you have $7 in your pocket to purchase some goods and services today. How much money would you have needed in 1950 to buy the same amount of goods and services?

The CPI for 1950 = 24.1

The CPI for 1998 = 162.9 (estimate based on the first 4 months of 1998)

Use the following formula to compute the calculation:

1950 Price = 1998 Price * (1950 CPI / 1998 CPI)

$7.00 x 24.1 / 162.9 = $1.03