# A)if a car cost \$17,000 in 2010 use the inflammation rate of 164.68% to estimate what the car would have cost in 1980b)If a pair of jeans cost \$80 in 2010 use the inflammation rate of 66.8% to estimate the cost of the jeans would have been in 1990

1
by sweetysiri92

2014-09-10T09:09:10+05:30

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a ) Car costs in year 2010 : \$17,000
cost of car in year 1980 = P.

Cost P of cars increased at the rate 164.68% over the whole of (2010-1980) = 30 years.

Inflation or increase in the price of car = P * 164.68% in 2010 over the price in 1980

Total price of car in 2010 = Price in 1980 + P* 164.68/100
= P + P * 1.6468 = P * 2.6468
= \$ 17,000

P = \$ 17,000/2.6468 = \$ 6, 422.85

b) A pair of jeans cost \$ 80 in 2010
Inflation rate is 66.8 % between 1990 and 2010, with the base rate being the cost price in 1990.  That means the price increased by 66.8% in 20 years from 1990.

Cost price in 1990 = CP  let us say
Increase in price due to inflation: 66.8 % of CP
= 66.8/100 * CP = 0.668 CP

Cost price of jeans in 2010  = CP + increase due to inflation
= CP + 0.668 CP  = 1.668 CP

So 1.668 CP = \$ 80
CP = \$80/1.668 = \$ 47.96  or  \$ 47  rounded off.

sorry i did not see b) part. part a) was highlighted. so it was easy to miss b)
thanks