Question

In 1970, a bottle of dishwashing detergent cost $0.50. To answer each of the parts below, assume that the consumer price index (CPI) was 29.6 in 1960, 38.8 in 1970, and 82.4 in 1980.

If the price of dishwashing detergent increased at the same rate as the CPI from 1970 to 1980, how much did a bottle of dishwashing detergent cost in 1980? By how much did the price of a bottle of dishwashing detergent increase from 1970 to 1980?

Answer 1

Given:
1970 price of dish washing detergent in a bottle : $0.50

CPI
1960 = 29.60
1970 = 38.80
1980 = 82.40

(82.40 - 38.80) / 38.80 = 1.124
1.124 x 100% = 112.4% rate of increase

$0.50 * 112.4% = $0.562 is the 1980 price of the dish washing detergent.