Good X sold for $40 in 1957.The CPI in 1957 was 27.6 and the CPI in 2009 was 214.537.What was the price of good X in 2009 dollars?

Question

Quizplus · Accepted Answer

To adjust for inflation, we need to use the formula: 
Price in year 2 = (Price in year 1) x (CPI in year 2) / (CPI in year 1)

Plugging in the given values: 
Price in 2009 = $40 x (214.537)/(27.6) 
Price in 2009 = $310.92

Therefore, the answer is choice D, $310.92.

Good X Sold for $40 in 1957