Year Annual CPI Actual Price of a Calculator
1995 152.400 $8.99
2000 172.200 $10.49
2005 195.300 $12.10
2010 218.056 $12.75
2015 237.017 $13.89
Based on inflation from the year 1995, calculate the expected price of a calculator for 2005. 4 points
Based on inflation from the year 1995, calculate the expected price of a calculator for 2015. 4 points
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To calculate the expected price of a calculator for 2005 based on inflation from 1995, follow these steps:
Step 1: Calculate the inflation rate from 1995 to 2005.
Inflation rate = (CPI in 2005 - CPI in 1995) / CPI in 1995
Inflation rate = (195.3 - 152.4) / 152.4 = 0.2807
Step 2: Calculate the expected price of a calculator in 2005.
Expected price = Actual price in 1995 * (1 + inflation rate)
Expected price = $8.99 * (1 + 0.2807) = $8.99 * 1.2807 = $11.51
Therefore, the expected price of a calculator for 2005 based on inflation from 1995 is $11.51.
To calculate the expected price of a calculator for 2015 based on inflation from 1995, follow the same steps:
Step 1: Calculate the inflation rate from 1995 to 2015.
Inflation rate = (CPI in 2015 - CPI in 1995) / CPI in 1995
Inflation rate = (237.017 - 152.4) / 152.4 = 0.5569
Step 2: Calculate the expected price of a calculator in 2015.
Expected price = Actual price in 1995 * (1 + inflation rate)
Expected price = $8.99 * (1 + 0.5569) = $8.99 * 1.5569 = $13.99
Therefore, the expected price of a calculator for 2015 based on inflation from 1995 is $13.99.
To calculate the expected price of a calculator for a given year based on inflation, we need to use the Consumer Price Index (CPI). CPI measures changes in the average price level of goods and services over time.
Here's how you can calculate the expected price of a calculator for 2005 and 2015 based on inflation:
Step 1: Calculate the Inflation Rate
To calculate the inflation rate for a particular year, subtract the CPI of the base year from the CPI of the target year, and divide the result by the CPI of the base year. Multiply the result by 100 to get the inflation rate as a percentage.
For 2005:
Inflation Rate = ((CPI of 2005 - CPI of 1995) / CPI of 1995) * 100
For 2015:
Inflation Rate = ((CPI of 2015 - CPI of 1995) / CPI of 1995) * 100
Step 2: Calculate the Expected Price
Take the actual price of the calculator in the base year (1995) and multiply it by the inflation rate calculated for the target year. Add this result to the actual price of the calculator in the base year to get the expected price for the target year.
For 2005:
Expected Price of Calculator in 2005 = Actual Price of Calculator in 1995 + (Actual Price of Calculator in 1995 * Inflation Rate for 2005)
For 2015:
Expected Price of Calculator in 2015 = Actual Price of Calculator in 1995 + (Actual Price of Calculator in 1995 * Inflation Rate for 2015)
Let's calculate the expected prices:
For 2005:
Inflation Rate for 2005 = ((195.300 - 152.400) / 152.400) * 100 = 28.13%
Expected Price of Calculator in 2005 = $8.99 + ($8.99 * 0.2813) ≈ $11.51
For 2015:
Inflation Rate for 2015 = ((237.017 - 152.400) / 152.400) * 100 = 55.67%
Expected Price of Calculator in 2015 = $8.99 + ($8.99 * 0.5567) ≈ $14.02
Therefore, based on inflation from the year 1995, the expected price of a calculator for 2005 is around $11.51, and for 2015 is around $14.02.