Question

Calculate how much each of the following items is worth in terms of today's dollars using 180 as the price index for today.

A. In 1925, the CPI was 18 and the price of a movie ticket was $0.30.
B. In 1930, the CPI was 14 and a cook earned $20 a week.
C. In 1940, the CPI was 16 and a gallon of gas cost $0.20.

Answer 1

A. $3

B. $257.142

C. $2.25

Step-by-step explanation:

A. In 1925, the CPI was 18 and the price of a movie ticket was $0.30.

The current CPI is 180.

The price today will be

=
`(Price)/(CPI)\ *\ Current\ CPI`

=
`(0.3)/(18)\ *\ 180`

= $3

B. In 1930, the CPI was 14 and a cook earned $20 a week.

The current CPI is 180.

The price today will be

=
`(Price)/(CPI)\ *\ Current\ CPI`

=
`(20)/(14)\ *\ 180`

= $257.142

C. In 1940, the CPI was 16 and a gallon of gas cost $0.20.

The current CPI is 180.

The price today will be

=
`(Price)/(CPI)\ *\ Current\ CPI`

=
`(0.2)/(16)\ *\ 180`

= $2.25