Question

Price indexes can be used to compare prices across different periods. Suppose that a year of tuition for college at public institutions averaged a cost of ​$1 comma 834 in 1989 and that the CPI index was 117 in 1989. If the CPI index was 229 in​ 2009, then the cost of tuition in​ 2009, as the result of​ inflation, would equal ​$ nothing. ​(Enter your response rounded to the nearest whole​ number.)

Answer 1

Answer:

According to consumer price index a tuiton of 1,834 in 1989 is worth: $3,591.58 in 2009

Explanation:

To convert a past price into future we do as follow:

$\frac{CPI_{2009}}{CPI_{1989}}$

229/117 = 1.9572649

Then, we multiply the past amount by this multiplier to get the value in todays dollars:

1,835 x 1.9572649 = 3,591.581 = 3,591.58