Question

in 1931, president herbert hoover was paid a salary of $75,000. government statistics show a consumer price index of 15.2 for 1931 and 207 for 2007. president hoovers 1931 salary was equivalent to a 2007 salary of about $. multiple choice 1 point 952,245.82 1,021,381.58 5,507.25 254,124.42

Explanation:

Step1: Recall the formula for adjusting for inflation

The formula to convert a past - year amount to a present - year amount using the Consumer Price Index (CPI) is $A_{2}=A_{1}\times\frac{CPI_{2}}{CPI_{1}}$, where $A_{1}$ is the amount in the past year, $CPI_{1}$ is the CPI of the past year, $A_{2}$ is the amount in the present year, and $CPI_{2}$ is the CPI of the present year.

Step2: Identify the values

We know that $A_{1} = 75000$ (Herbert Hoover's 1931 salary), $CPI_{1}=15.2$ (CPI in 1931), and $CPI_{2} = 207$ (CPI in 2007).

Step3: Calculate the equivalent 2007 salary

Substitute the values into the formula: $A_{2}=75000\times\frac{207}{15.2}$.
$A_{2}=75000\times13.618421\approx1021381.58$.

Answer:

1,021,381.58