In Questions make the assumption that the change in housing prices exactly matches the change in the CPI. In fact, housing is only part of the CPI, and figures into the CPI through rents rather than sale prices, so this assumption may be far from correct.
-Chris bought a house in 1957 and sold it in 1997 for $115,000. If the 1957 CPI is 28.1 and the 1997 CPI is 160.5, how much would the house be worth in 1957 dollars?
A) $39,096
B) $20,134
C) $25,499
D) $49,667

Question

Quizplus · Accepted Answer

To find the 1957 dollar value of the house, use the formula: 1957 value = 1997 value * (1957 CPI / 1997 CPI). This gives $115,000 * (28.1 / 160.5) = $20,134.

In Questions Make the Assumption That the Change in Housing