Question

The current cost of a typical desktop computer is $745. The cost in year 1983 was $1,445 with fewer capabilities. What is the CPI for the desktop computer?

Answer 1

A consumer price index (CPI) measures changes in the price level of market basket of consumer goods and services purchased by households.The annual percentage change in a CPI is used as a measure of inflation
CPI=(1,445÷745)×100=194

Answer 2

55.6

Explanation:

We have been given that the current cost of a typical desktop computer is $745. The cost in year 1983 was $1,445 with fewer capabilities.

To find CPI for the desktop computer, we will use formula:

`\text{CPI }=\frac{\text{Price of goods in given year}}{\text{Price of goods in base year}}* 100`

`\text{CPI for the desktop computer}=(\$745)/(\$1445)*100`

`\text{CPI for the desktop computer}=0.5155709342*100`

`\text{CPI for the desktop computer}=51.55709342\approx 55.6`

Therefore, the CPI for the desktop computer is 55.6.