The minimum wage in 1999 was $5.15. What is the equivalent amount in 1942 dollars? (Assume the 1999 CPI is 166.2 and the 1942 CPI is 16.3.)
A) about 47 cents
B) about 49 cents
C) about 51 cents
D) about 53 cents

Question

Quizplus · Accepted Answer

The correct answer is C.The formula for converting a dollar amount from one year to another is:Amount in year 1 = Amount in year 2 * (CPI in year 1 / CPI in year 2)In this case, we want to convert $5.15 from 1999 to 1942 dollars. So, we have:Amount in 1942 = $5.15 * (16.3 / 166.2) = $0.51Therefore, the equivalent amount in 1942 dollars is about 51 cents.

The Minimum Wage in 1999 Was $5