Mr.Clooney inherited a sum of $30,000 in 1990.If the price index was 100 for 1990 and 188 for 2014,the value of the money he inherited in 2014 dollars is ________.
A) $56,400
B) $45,200
C) $38,800
D) $48,000

Question

Quizplus · Accepted Answer

To find the value of the money in 2014 dollars, we need to adjust the initial value with inflation. We use the formula:

Value in 2014 dollars = (Value in starting year dollars) x (Price index in ending year / Price index in starting year)

Plugging in the given values:

Value in 2014 dollars = 30,000 x (188/100) = $56,400

Therefore, the best choice is A) $56,400

MrClooney Inherited a Sum of $30,000 in 1990