Suppose that a can of soda cost 30 cents in 1970 and the Consumer Price Index (CPI) in 1970 was 36. If the CPI in 2016 was 240, then the price of the can of soda in 2016 was:
A) $1.70.
B) $2.00.
C) $2.25.
D) $2.50.

Question

Quizplus · Accepted Answer

To adjust the price from 1970 to 2016 using the CPI, you use the formula: Price in 2016 = (Price in 1970) * (CPI in 2016 / CPI in 1970). Substituting the given values: Price in 2016 = 0.30 * (240 / 36) = 0.30 * 6.67 = $2.00.

Suppose That a Can of Soda Cost 30 Cents in 1970