A valuable asset was priced at $1 million in 1995. What should be its nominal price in 2012 if the CPI was 95 in 1995 and 145 in 2012?
A)$0.95 million
B)$1.25 million
C)$1.45 million
D)$1.53 million
E)$1.65 million

Question

Quizplus · Accepted Answer

The nominal price in 2012 can be calculated using the formula: (Price in 1995) * (CPI in 2012 / CPI in 1995) = ($1 million) * (145 / 95) = $1.53 million.

A Valuable Asset Was Priced at $1 Million in 1995