In 1969,Don bought a Dodge Dart for $2500.In 2012,he bought a Honda Civic for $22 000.If the price index in 1969 was 36.7 and the price index in 2012 was 190,what is the price of the Dodge Dart in 2012 prices?

Question

In 1969,Don bought a Dodge Dart for $2500.In 2012,he bought a Honda Civic for $22 000.If the price index in 1969 was 36.7 and the price index in 2012 was 190,what is the price of the Dodge Dart in 2012 prices?

Quizplus · Accepted Answer

To find the price of the Dodge Dart in 2012 prices, we need to adjust the original price of $2500 using the price indexes from 1969 and 2012.

First, we need to find the inflation factor between 1969 and 2012:

inflation factor = (price index in 2012 / price index in 1969) = 190 / 36.7 = 5.17

Next, we can use the inflation factor to adjust the original price:

Dodge Dart price in 2012 prices = $2500 x inflation factor = $2500 x 5.17 = $12,925

Therefore, the best choice is D, which is the closest to the calculated price of $12,925.

In 1969,Don Bought a Dodge Dart for $2500