In 1972 in Kelowna, BC, one could buy model rocket engines for $1.50. If those same engines cost $3.00 today, which of the following sets of CPI's would make the engine prices in today's dollars the same for both years?

Question

Quizplus · Accepted Answer

To calculate the inflation rate, we divide the price in today's dollars by the price in 1972 dollars and multiply by 100. For option A, the inflation rate would be 100/60 * 1.5 = $2.50, which is lower than the current price of $3.00. For option B, the inflation rate would be 110/60 * 1.5 = $2.75, still lower than the current price. For option D, the inflation rate would be 130/60 * 1.5 = $3.25, higher than the current price. Only option C gives an inflation rate of 120/60 * 1.5 = $3.00, the same as the current price. Therefore, choice C is the best option.

In 1972 in Kelowna, BC, One Could Buy Model Rocket