Question

Suppose you needed $\$2,900$ to buy a particular car in $1982$. How much money would you have needed in $2009$ to buy the same car? Assume that all prices have risen at the same rate as the CPI.

How much money would you have needed?

Year	CPI	Year	CPI	Year	CPI	Year	CPI
$1976$	$56.9$	$1985$	$107.6$	$1994$	$148.2$	$2004$	$188.9$
$1977$	$60.6$	$1986$	$109.6$	$1995$	$152.4$	$2005$	$195.3$
$1978$	$65.2$	$1987$	$113.6$	$1996$	$156.9$	$2006$	$201.6$
$1979$	$72.6$	$1988$	$118.3$	$1997$	$160.5$	$2007$	$207.3$
$1980$	$82.4$	$1989$	$124.0$	$1998$	$163.0$	$2008$	$215.3$
$1981$	$90.9$	$1990$	$130.7$	$1999$	$166.6$	$2009$	$214.5$
$1982$	$96.5$	$1991$	$136.2$	$2000$	$172.2$	$2010$	$218.1$
$1983$	$99.6$	$1992$	$140.3$	$2001$	$177.1$	$2011$	$224.9$
$1984$	$103.9$	$1993$	$144.5$	$2002$	$179.9$	$2012$	$229.6$

Answer 1

Calculate the current price.

Given: Base year price in $1982=\$2,900$.

CPI in, $2009=214.5$.

The CPI formula is defined as:

$\mathrm{CPI}=\left(\frac{\mathrm{Current}\mathrm{price}}{\mathrm{Base}\mathrm{price}}\right)·100$

Putt the values in the CPI formula, to calculate the current price:

$\begin{array}{rcl}214.5& =& \left(\frac{\mathrm{Current}\mathrm{Price}}{2900}\right)x100\\ & \Rightarrow & \mathrm{Current}\mathrm{price}=\frac{\left(214.5\mathrm{x}2900\right)}{100}\\ & \Rightarrow & \mathrm{Current}\mathrm{price}=\$6220.5\end{array}$

Hence, the current price in $2009$is $\$6220.5$.