Question

A basket of goods costs $85 in year 1. If the same basket costs $90 in year 2, what is the CPI for year 2?

Answer 1

Answer:

CPI = 105.88

Step-by-step explanation:

Given as

Basket of goods costs for first year = $88

Basket of goods costs for second year = $90

Now , Cost Price Index (CPI) (T)= $\frac{cost of market basket (T)}{cost of market basket (b)} times 100$

Or , CPI (T)= $\frac{90}{85} times 100$

∴ CPI (T) = 105.88      Answer