Monthly expenditures for a family of 4 in 2010 averaged $1,400.In 2011,the cost of the same purchases was $1,500.If 2010 is the base year,what was the CPI in 2011?

Question

Quizplus · Accepted Answer

To calculate the CPI in 2011, we need to use the formula:

CPI = (Cost of basket in current year / Cost of basket in base year) x 100

We know that the cost of the basket in 2010 was $1,400, so we can find the cost of the basket in 2011 by dividing $1,500 by $1,400 and multiplying by 100:

CPI = ($1,500 / $1,400) x 100 = 107.14

Rounding this to the nearest whole number gives us a CPI of 107, which is closest to choice B.

Monthly Expenditures for a Family of 4 in 2010 Averaged