Question

A hospital is comparing last year's emergency rescue services expenditures to those from 10 years ago. Last year's expenditures were $100,500. Ten years ago, the expenditures were $72,800. The CPI for last year is 168.5 as compared to 121.3 ten years ago. After adjusting for inflation, what percentage change occurred in expenditures for emergency rescue services? a) 38.0% increase. b) 13.8% increase. c) 61% decrease. d) 18.1% decrease.

Answer 1

To calculate the percentage change in expenditures for emergency rescue services after adjusting for inflation, we need to use the Consumer Price Index (CPI) for both years. By calculating the difference in CPI values and adjusting the expenditures accordingly, we find that there was a 38.0% increase in expenditures after accounting for inflation.

Step-by-step explanation:

To calculate the percentage change in expenditures for emergency rescue services after adjusting for inflation, we first need to calculate the inflation rate. We can do this by using the Consumer Price Index (CPI) for both years.

The percentage change is calculated by taking the difference between the CPI values from the two years and dividing it by the CPI value from ten years ago:

Percentage Change = ((CPI_last_year - CPI_ten_years_ago) / CPI_ten_years_ago) × 100

Next, we can calculate the adjusted expenditures:

Adjusted Expenditures = (Expenditures_last_year / CPI_last_year) × CPI_ten_years_ago

Finally, we can calculate the percentage change in expenditures:

Percentage Change in Expenditures = ((Adjusted Expenditures - Expenditures_ten_years_ago) / Expenditures_ten_years_ago) × 100

In this case, the percentage change in expenditures for emergency rescue services after adjusting for inflation is a 38.0% increase.