Babe Ruth's 1931 salary was $80,000. The price index for 1931 is 16 and the price index for the current year is 210. What would Ruth's 1931 salary be equivalent to in the current year?

Question

Quizplus · Accepted Answer

To adjust Babe Ruth's 1931 salary to the current year's dollars, you use the formula: (Old Salary) * (Current Price Index / Old Price Index). Plugging in the numbers: $80,000 * (210 / 16) = $1,050,000.

Babe Ruth's 1931 Salary Was $80,000