Ruth collected Social Security payments of $220 a month in 1985.If the price index rose from 90 to 105 between 1985 and 1986,then her Social Security payments for 1986 should have been about

Question

Quizplus · Accepted Answer

To calculate Ruth's Social Security payments for 1986, we need to adjust her payments for inflation using the price index. We can do this by dividing the price index for 1986 by the price index for 1985 and then multiplying this ratio by her 1985 payments.

Ratio = Price Index 1986 / Price Index 1985 = 105 / 90 = 1.1667
Social Security payments for 1986 = Ratio x 1985 payments = 1.1667 x $220 = $256.67

Therefore, the closest option to Ruth's Social Security payments for 1986 is option C, $256.67.

Ruth Collected Social Security Payments of $220 a Month in 1985.If