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In 1980, when the consumer price index (CPI) was 82.4, Ivan purchased a house for $71,900. Assuming that the price of houses increased at the same rate as the CPI from 1970 to 1980, approximately how much would the house have cost in 1970, when the CPI was 38.8?

Respuesta :

anthougo

The cost of a house in 1970 when the CPI was 38.8 compared to its cost in 1980 when the CPI was 82.4 was $33.855.83.

What is CPI?

CPI means Consumer Price Index.

It is an average weight that rates the changes in a basket of consumer items to determine its price index.

The CPI is also used to determine an economy's inflation.

Data and Calculations:

Price of a house in 1980 = $71,900

Consumer Price Index in 1980 = 82.4

Consumer Price Index in 1970 = 38.8

Price of the house in 1970 = $33,855.83 ($71,900/82.4 x 38.8)

Thus, the cost of a house in 1970 was $33.855.83.

Learn more about Consumer Price Index at https://brainly.com/question/1889164

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