$30,000 to maintain a particular standard of living in 1980 Average Annual Consu
ID: 3136242 • Letter: #
Question
$30,000 to maintain a particular standard of living in 1980 Average Annual Consumer Price Index (CPI) (1982-1984 100) Year How much would you have needed in 2000 to maintain the same standard of living? Assume that all prices have risen at the same rate as the CPI. CPI I CPI 1524 156.9 160.5 163.0 166 6 172.2 CPI Year 19731985 1974 1975 49.3 53.8 56.9 60.6 65.2 72.6 82.4 90.9 96.5 99.6 107.6 109.6 113.6 118.3 124.0 130.7 1362 140.3 144.5 48.2 1996 1997 1998 1999 2000 2001 2002184.0 2003188.9 How much would you have needed? 1977 1978 1979 1980 1981 1982 1983 1986 1987 1988 1989 1990 1991 1992 1993 1994 (Round to the nearest dollar.) 179.9 2004 2005 195 3 Enter your answer in the answer boxExplanation / Answer
CPI in 1980 = 82.4
CPI in 2000 = 172.2
as CPI in 2000 is more than 1980
it means inflation in prices have risen in 2000 than 1980
if we spent $30,000 in 1980 then we need more money in 2000 to maintain same standards
it means effective prices after adjusting inflation must be same if we want to maintain same standards
so, if we spent $ x in 2000
then,
$30000 / 82.4 = x / 172.2
=> x = $30000 * 172.2 / 82.4
= $62694 (answer)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.