In 1986,Ken bought a Ford Mustang for $8,000.If the price index was 122 in 1986 and the price index was 280 in 2011,then what is the price of the Mustang in 2011 dollars?
A)$3,485.71
B)$8,100.71
C)$18,360.66
D)$22,400.00

Question

Quizplus · Accepted Answer

To adjust for inflation, use the formula: (Price in past dollars) * (Price index in future year / Price index in past year). So, $8,000 * (280 / 122) = $18,360.66.

In 1986,Ken Bought a Ford Mustang for $8,000