Question

In 1983, a year-long newspaper subscription cost $12.75. Today, a year-long newspaper subscription costs $28.50. If the CPI is 193, what is the relation of the actual price of a year-long newspaper subscription to the expected price, to the nearest cent?
a.
The actual price is $14.79 higher than the expected price.
b.
The actual price is $3.89 higher than the expected price.
c.
The actual price is $9.20 lower than the expected price.
d.
The actual price is $11.86 lower than the expected price.

Answer 1

Take 1983 as the base (CPI = 100), so a CPI of 193 means prices have risen by a factor of 1.93.
Expected price = 12.75 × 1.93 = 24.6075 → $24.61.
Actual price = $28.50, so it is $28.50 − $24.61 = $3.89 higher.

Answer: b.