Question

A basket of goods costs $85 in year 1. If the same basket costs $90 in year 2, what is the CPI for year 2?

Answer 1

CPI = 105.88

Explanation:

Given as

Basket of goods costs for first year = $88

Basket of goods costs for second year = $90

Now , Cost Price Index (CPI) (T)=
`(cost of market basket (T))/(cost of market basket (b)) times 100`

Or , CPI (T)=
`(90)/(85) times 100`

∴ CPI (T) = 105.88 Answer