In 1983, a microwave oven cost $78.75. Today, a microwave oven costs $92.66. If the CPI is 177, what is the relation of the actual price of a microwave oven to the expected price, to the nearest cent?
Answer
A
The actual price is $46.73 lower than the expected price.
B
The actual price is $5.59 lower than the expected price.
C
The actual price is $13.91 higher than the expected price.
D
The actual price is $71.35 higher than the expected price.
Explanation
Adjust the 1983 price using the CPI: $78.75 × 1.77 = $139.39, the expected price today. The actual price, $92.66, is $139.39 − $92.66 = $46.73 lower than expected. So the correct choice is “The actual price is $46.73 lower than the expected price.”
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