34. The consumer price index (CPI) indicates the average price of a fixed basket

Question

34. The consumer price index (CPI) indicates the average price of a fixed basket of goods and services. It is customarily taken as a measure of inflation and is frequently used to adjust pensions. The CPI was 9.9 in July 1913, was 100 in July 1983, and was 215.35 in July 2009. This means that $9.90 in July 1913 had the same purchasing power as $100.00 in July 1983, and the same purchasing power as $215.35 in July 2009. In 2009, the CPI fell for the first time since 1955. However, for most of the preceding 15 years it had grown at an average rate of 2.5% per year. Assuming that the CPI will rise at 2.5% per year in the future, in what year will the July CPI have at least doubled from its July 2009 level? Note: Each year, the CPI will be 1.025 times the CPI for the previous year.

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