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Ethel purchased a bag of groceries in 1970 for $8. She purchased the same bag of groceries in 2006 for $25. If the price index was 38.8 in 1970 and the price index was 180 in 2006, then what is the price of the 1970 bag of groceries in 2006 dollars?

User Tchami
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1 Answer

2 votes

Answer:

D. $37.11

Step-by-step explanation:

Given that

Price of grocery bag in 1970 = 8

Price index in 1970 = 38.8

Price index in 2006 = 180

Thus,

Price if grocery bag in 2006

= price in 1970 × (Price index 2006 ÷ price index 1970)

= 8 × (180 ÷ 38.8)

= 8 × 4.639

= 37.112

= $37.11

User Dexter
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