Babe Ruth's 1931 salary was $80 000. The price index for 1931 is 15.2 and the price index for 2010 is 195. What would Ruth's 1931 salary be equivalent to in 2010?

Question

Quizplus · Accepted Answer

To convert the 1931 salary to 2010 dollars using the price indices, we need to use the formula:

(2010 index / 1931 index) x 1931 salary = equivalent 2010 salary

Plugging in the values:

(195/15.2) x $80,000 = $1,026,316

So Ruth's 1931 salary would be equivalent to approximately $1,026,000 in 2010. The closest choice is D.

Babe Ruth's 1931 Salary Was $80 000