Question

If the cpi was 150 in 2015 and is 200 today, then 500 in 2015 has the same purchasing power today as select one:

1) 375
2) 560
3) 875
4) 250
5) 666.67

Answer 1

To determine the purchasing power of $500 in 2015, use the CPI formula: (CPI in current year / CPI in base year) * Amount in base year. Substituting the values gives a purchasing power of $666.67 in the present day.

Step-by-step explanation:

The CPI (Consumer Price Index) is a measure of inflation that tracks changes in the price of goods and services over time. To determine the purchasing power of $500 in 2015, we can use the formula:

Purchasing Power = (CPI in current year / CPI in base year) * Amount in base year

Substituting the values, we get: Purchasing Power = (200 / 150) * 500 = 666.67

Therefore, $500 in 2015 has the same purchasing power today as $666.67