Using 2004 as the base year, calculate the CPI for 2014 for this basket of goods, which includes bananas, chicken, and eggs. Then, determine the percentage by which prices increased between 2004 and 2014. CPI formula: CPI=((cost of basket in current year)/(cost of basket in base year))⋅100 Percentage change in price formula: percentage change in price=((CPI_2−CPI_1)/(CPI_1))⋅100%
Answer
A
The CPI for 2014 was 135, and prices increased by 35 percent.
B
The CPI for 2014 was 120, and prices increased by 20 percent.
C
The CPI for 2014 was 145, and prices increased by 45 percent.
D
The CPI for 2014 was 134, and prices increased by 34 percent.