A 1963 Chevy Bel Air, a classic car today, cost $2400 new in mid-1963. How much would that be in 2012 dollars?
http://www.bls.gov/data/inflation_calculator.htm
To calculate the inflation-adjusted value of $2400 in 1963 to its equivalent value in 2012 dollars, we need to take into account the inflation rate over the years.
Here's how you can find the answer using the Consumer Price Index (CPI):
1. Identify the base year: In this case, the relevant base year is 1963 since the price is given in that year.
2. Determine the CPI for the base year: The CPI is a measure of prices for a basket of goods and services relative to a base period. Fortunately, the Bureau of Labor Statistics provides historical CPI data. For the base year 1963, the CPI was approximately 30.6.
3. Identify the target year: In this case, the target year is 2012.
4. Determine the CPI for the target year: Using historical CPI data, we find that the CPI for 2012 was approximately 229.6.
5. Calculate the inflation rate: Divide the CPI for the target year by the CPI for the base year and multiply by 100 to express it as a percentage. In this case: (229.6 / 30.6) * 100 = 749.02.
6. Adjust for inflation: Take the inflation rate calculated in step 5 and divide it by 100 to convert it to a decimal. Then multiply the initial price ($2400) by the inflation rate. In this case: $2400 * (749.02 / 100) ≈ $17,976.
Therefore, the inflation-adjusted value of a 1963 Chevy Bel Air that cost $2400 back then would be approximately $17,976 in 2012 dollars.