Assume that a Toyota sold for 1,476,000 yen in 1990.If the price for this automobile was $8,200 in 1985,and the car still sells for the same amount of yen today,but the current exchange rate is 90 yen per dollar,what is the car selling for today in U.S.dollars?

Question

Quizplus · Accepted Answer

First, we need to find out the equivalent price of the Toyota in 1985 dollars. To do this, we need to adjust the 1985 price for inflation.

Using the Consumer Price Index (CPI), we can see that the general level of prices increased by about 23% between 1985 and 1990. Therefore, the equivalent price in 1985 dollars would be:

$8,200 * (1 + 0.23) = $10,066

Next, we need to convert the 1990 price from yen to dollars using the current exchange rate:

1,476,000 yen ÷ 90 yen/dollar = $16,400

Therefore, the Toyota is selling for $16,400 in U.S. dollars today. The correct choice is B.

Assume That a Toyota Sold for 1,476,000 Yen in 1990