Given:
Consumer price index in 1991 = 136.2
Consumer price index in 2017 = 244
One billion dollar in numbers = 1,000,000
To find:
Money required in 2017 to have the same amount of real purchasing power that they did in 1991.
Solution:
Assuming 1991 as base year and 2017 as target year,
The purchasing power during 1991-2017 is
[tex]\Rightarrow\text { 1,000,000 } \times \frac{\text { CPI of target year }}{\text { CPI of base year }}[/tex]
[tex]\Rightarrow \frac{244}{136.2}\times1,000,000[/tex]
[tex]\Rightarrow 1.791483\times1,000,000[/tex]
[tex]\Rightarrow 1,791,483.11 \approx 1,791,483[/tex]
Result:
In 2017, The Barenaked Ladies need [tex]\bold{\$1,791,483}[/tex] to have the same amount of real purchasing power that they did in 1991.
