Posted by Lisa on Wednesday, January 4, 2012 at 5:04pm.
Hello! Could someone please check my answers for the first 2 problems and help me out with the 3rd? Thanks!
1. If the CPI in 1863 was 9 and the CPI in 2000 was 171.9, how much has inflation increased (%) since 1863?
I used the inflation rate equation and got a 1898.89% increase as my answer.
2. If a new loaded Mustang in 1964 (CPI 31.0) cost $2,800, how much should the car cost in 2010 (CPI 218.0) after adjusting for inflation?
I used the "salary in today's currency" equation and got $19,690.32.
3. A new mustang starting price is over 20,000. Has the car kept pace with inflation or exceeded it? Why?
I'm confused by this, please help.
- Economics (inflation) - Henry, Thursday, January 5, 2012 at 4:56pm
1. (171.9/9) * 100% = 1910 %.
It went from 100% to 1910%.
% Increase = 1910% - 100% = 1810%.
Increase = 171.9-9 = 162.9.
%Increase = (162.9/9) * 100% = 1810%.
2. Cost = (218/31) * $2800 = $19,690.32
3. 2010-1964 = 46 years.
$19,690.32/46 yrs. = $428.05 /yr.
Cost = 19,690.32+428.05/yr * 2yrs =
$20,546.42 = Cost of new car(yr 2012).
Answer This Question
More Related Questions
- Math - A country's Consumer Price Index (CPI) is a measure of the cost of living...
- Economics - (*CPI*) - In Brazil, the reference base period for the CPI is ...
- adult education - Explain what the CPI is and do you think that the CPI ...
- Quantative Reasoning - Explain what the CPI is and do you think that the CPI ...
- Math - A basket of goods and services representative of the CPI cost $2750 when ...
- macroeconomics - Suppose in 2009 the united states congress passes a minimum ...
- Economics - Why is it that the people responsible for pensions use the CPI as an...
- Economics - What is the percent of increase when CPI is 121 then the initial ...
- Economics - Suppose that the residents of Vegopia spend all of their income on ...
- economics - Suppose that the residents of Veggieland spend all of their income ...