Mr. Clooney inherited a sum of $30,000 in 1990. If the price index was 100 for 1990 and 188 for 2014, the value of the money he inherited in 2014 dollars is ________.
A) $56,400
B) $45,200
C) $38,800
D) $48,000

Question

Quizplus · Accepted Answer

To adjust the value of the money inherited to 2014 dollars, you use the formula: Value in 2014 dollars = (Value in 1990 dollars) * (2014 price index / 1990 price index). Plugging in the numbers: $30,000 * (188 / 100) = $30,000 * 1.88 = $56,400.

Mr Clooney Inherited a Sum of $30,000 in 1990