Related to the Economics in Practice on p. 453: The Consumer Price Index in the United States was 215.3 in 2008 and 214.5 in 2009. If a retiree received a monthly pension check of $4,500.00 in 2008 and her pension is tied to the CPI, how much would her monthly pension check be in 2009?
A) $4,464.00
B) $4,483.28
C) $4,500.00
D) $4,714.50

Question

Quizplus · Accepted Answer

To calculate the new monthly pension check, we need to use the formula:

New pension check = (CPI in new year ÷ CPI in old year) × old pension check

Plugging in the values, we get:

New pension check = (214.5 ÷ 215.3) × $4,500.00
New pension check = 0.996 × $4,500.00
New pension check = $4,483.28

Therefore, the correct answer is B, $4,483.28.

Related to the Economics in Practice on P