In 2004 the actual price of unleaded gasoline surpassed $2.00 a gallon climbing

Question

In 2004 the actual price of unleaded gasoline surpassed $2.00 a gallon climbing to an unprecedented $2.03 a gallon. Motorists were outraged longing to 20 years earlier when they were paying just $1.19 a gallon. Were the motorists right to be upset? The consumer price index was 1.81 times itself in 1984?

In 2004 the actual price of unleaded gasoline surpassed $2.00 a gallon climbing to an unprecedented $2.03 a gallon. Motorists were outraged longing to 20 years earlier when they were paying just $1.19 a gallon. Were the motorists right to be upset? The consumer price index was 1.81 times itself in 1984?

Explanation / Answer

inflation rate = (1.81-1)*100 =81%

so increase i price = 81% of 1.19 = 0.891

so price including inflation = 0.891+1.19 = 2.081

so they dont need to be upset

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