A pair of linen slacks cost $28.5 in 1972; CPI was 130
Cost in 2001=?; CPI was 530
CPI is represented by the following expression:
[tex]\begin{gathered} \text{Price in dollars of the original year}\cdot(Price\text{ level in 2001/price level in 1972)} \\ 28.5\cdot(\frac{530}{130})=28.5\cdot\frac{53}{13}=116.19\text{ usd} \end{gathered}[/tex]
So, $28.5 in 1972 is the same amount as $116.19 in 2001
