Scenario 24-2
The price tag on a golf ball in 1975 read $0.20,and the price tag on a golf ball in 2005 read $2.00.The CPI in 1975 was 52.3,and the CPI in 2005 was 191.3.
-Refer to Scenario 24-2.The price of a 1975 golf ball in 2005 dollars is
A)$0.05.
B)$0.53.
C)$0.73.
D)$2.00.

Question

Quizplus · Accepted Answer

To find the price of a 1975 golf ball in 2005 dollars, we need to adjust for inflation using the CPI. We can use the following formula:
Price in 2005 dollars = (Price in 1975 dollars) x (CPI in 2005 / CPI in 1975)
Plugging in the values we have:
Price in 2005 dollars = $0.20 x (191.3 / 52.3) = $0.73
Therefore, the correct answer is (C) $0.73.

Scenario 24-2 The Price Tag on a Golf Ball in 1975 Read