The 2012 CPI was 177 and the 1982 CPI was 96.5.How much would you need in 2012 in order to buy what you were able to buy with the $1000 in 1982?

Question

Quizplus · Accepted Answer

To calculate the inflation rate from 1982 to 2012 we use the formula:
Inflation rate = (CPI in 2012 - CPI in 1982) / CPI in 1982 x 100%
= (177 - 96.5) / 96.5 x 100%
= 83.5%
This means that the cost of goods has increased by 83.5% from 1982 to 2012. To find out how much $1000 in 1982 is worth in 2012, we multiply $1000 by the inflation rate multiplier (1 + 83.5%) which equals 1.835. Therefore:
$1000 x 1.835 = $1835
Rounding to the nearest cent gives:
Answer: A) $1834.20

The 2012 CPI Was 177 and the 1982 CPI Was