Question

The price tag on a golf ball in 1975 read $0.20, and the price tag on a golf ball in 2005 read $2.00. The CPI in 1975 was 52.3, and the CPI in 2005 was 191.3. Refer to Scenario 24-2. The price of a 1975 golf ball in 2005 dollars is

Answer 1

$0.73 (Approx)

Step-by-step explanation:

Given:

Price in 1975 = $0.20

Cost price index in 1975 = 52.3

Cost price index in 2005 = 191.3

Price in 2005 = ?

Computation of golf ball Price in 2005 :

Price in 2005 = [Cost price index in 2005 / Cost price index in 1975] × Price in 1975

Price in 2005 = [191.3 / 52.3] × 0.20

Price in 2005 = [3.65774379] × 0.20

Price in 2005 = 0.731548758

Price in 2005 = 0.73 (Approx)