In 1965 powdered gelatin cost 10 cents per box at the grocery store. If the 1965 CPI is 31.5 and the 1999 CPI is 166.2, compute this cost in 1999 dollars.

Question

Quizplus · Accepted Answer

To adjust the cost from 1965 to 1999 dollars, use the formula: (Cost in 1965) * (CPI in 1999 / CPI in 1965). Plugging in the numbers: 10 cents * (166.2 / 31.5) = 10 * 5.28 = 52.8 cents, which rounds to 53 cents.

In 1965 Powdered Gelatin Cost 10 Cents Per Box at the Grocery