In 1999 a compact car can cost approximately $14,000. What is this cost in 1990 dollars, the year that you bought your last car? (Assume the 1999 CPI is 166.2 and the 1990 CPI is 130.7.)
A) approximately $9300
B) approximately $13,940
C) approximately $11,010
D) approximately $17,803

Question

Quizplus · Accepted Answer

To convert the 1999 cost to 1990 dollars, use the formula: (Cost in 1999 dollars) * (1990 CPI / 1999 CPI) = Cost in 1990 dollars. Plugging in the values: $14,000 * (130.7 / 166.2) ≈ $11,010.

In 1999 a Compact Car Can Cost Approximately $14,000