relative value of money

[tali122]

which is the best mearurement for finding out what a particular sum of money would be worth today- i have checked out the website but dont know wheter to use RPI or average earnings (this is actually 2 out of 5 factors but i have discounted the others)

�100 in 1873 was given as �5740 today RPI

and �44,212 using average earnings today- problem is there is a substantial difference between the two figures -yet both seem relevant

any ideas?

[coyn]

http://www.eh.net/hmit/ukcompare/

[tali122]

yes that is the site im using- BUT which method do i use!

[coyn]

Sorry tali I don't understand your question.

[tali122]

lcoyn -look at the figures ive given (from your link)for �100 in original question -there is a substantial difference -so which is more accurate figure- �5740 or �44212?

[dzug]

Both are arithmetically correct and both are relevant.

Which is better depends on what you are trying to measure. What a sum of money is 'worth' is a very hazy concept, not capable of an exact answer until you decide what you want it to mean - and probably not even then.

What your figures actually show is that earnings have gone up rather more than prices - ie on average people are in material terms better off.