In 1983, a year-long newspaper subscription cost $12.75. Today, a year-long newspaper subscription costs $28.50. If the CPI is 193, what is the relation of the actual price of a year-long newspaper subscription to the expected price, to the nearest cent?

Question

Mathematics

Camryn Rollins

11 March, 02:42

In 1983, a year-long newspaper subscription cost $12.75. Today, a year-long newspaper subscription costs $28.50. If the CPI is 193, what is the relation of the actual price of a year-long newspaper subscription to the expected price, to the nearest cent?

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Answers (1)

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Andreas Bailey · Answer 1

The CPI or the Customer Price Index is calculated through the equation,

CPI = (price at a certain year / price at the base year) x 100

If our base year is 1983, the price of a year-long newspaper subscription will cost,

193 = (price at a certain year / 12.75) x 100

price at a certain year = $24.6075

Thus, the current price which is $28.50 is slightly higher than the expected price based on the given CPI.