Question

The CPI for 1930 was 16.7, while for 1939 it was 13.9. If an item costs $100 in 1930, how much would it have cost in 1939?

Answer 1

$83.2

Explanation:

If the CPI for 1930 was 16.7, while for 1939 it was 13.9, the change in CPI will be 16.7 - 13.9 = 2.8. The amount lost within the year 19.30 to 1939 if the cost of the item in 1930 is $100 will be expressed as;

= 2.8/16.7 * 100

= 280/16.7

= $16.8

The amount the item would have cost in 1939 will be $100 - $16.8 = $83.2