Question

The current cost of a box of cereal is $3.39. At the time of this writing, the CPI for cereal is 289.7. What was the cost of a box of cereal in 1983 to the nearest cent?

Answer 1

To solve this problem we have to first identify the data that we need and is important. You can arrange it like this:

Current Cost of Cereal: $3.39

CPI: 289.7

To find the cost of a box of cereal in 1983 we will need to use the following formula:

Cost in Base Year = Current Cost/CPI*100

Replace the data in the formula and we get the following:

1983 = 3.39/289.7*100

In 1983 the cost of a box of cereal was $1.170176044

I hope this helps, Regards.