A pound of ground coffee cost $2.47 in 1992 and $6.50 in 2016. The ground coffee price index number (1992 = 100) for 2016 is:
A) (6.50/2.47) × 100 = 263.2.
B) (2.47/6.50) × 100 = 38.0.
C) (6.50 - 2.47) × 100 = 403.0.
D) (6.50 - 2.47)/(2016-1992) = 0.168.
E) (6.50 - 2.47)/(2016-1992) × 100 = 16.8.

Question

Quizplus · Accepted Answer

The ground coffee price index number is calculated by taking the current price in 2016 and dividing it by the price in 1992, then multiplying by 100 to get a percentage increase. So the correct equation is (6.50/2.47) × 100 = 263.2. Therefore, choice A is the correct answer. Choice B is the inverse of the correct calculation, and choices C and D are incorrect because they are not calculating the price index number. Choice E is close, but it forgets to multiply the expression by 100 to get a percentage increase.

A Pound of Ground Coffee Cost $2