Question

what is the purchasing power of $1 in 1984 in terms of 2010 dollars? the purchasing power of $1 in 1984 in terms of 2010 dollars is $ (round to the nearest cent.) average annual cpi (1982 - 1984 = 100) year cpi year cpi year cpi 1982 96.5 1995 152.4 2008 215.3 1983 99.6 1996 156.9 2009 214.5 1984 103.9 1997 160.5 2010 218.1 1985 107.6 1998 163.0 2011 224.9 1986 109.6 1999 166.6 2012 229.6 1987 113.6 2000 172.2 2013 233.0 1988 118.3 2001 177.1 2014 236.7 1989 124.0 2002 179.9 2015 237.0 1990 130.7 2003 184.0 2016 240.0 1991 136.2 2004 188.9 2017 245.1 1992 140.3 2005 195.3 2018 251.1 1993 144.5 2006 201.6 2019 255.7 1994 148.2 2007 207.3 2020 258.8 2021 271.0

Explanation:

Step1: Recall the formula for purchasing power

The formula to convert the purchasing power of money from year \( A \) to year \( B \) is: \(\text{Purchasing Power in Year } B=\text{Amount in Year } A\times\frac{\text{CPI of Year } B}{\text{CPI of Year } A}\)

Here, the amount in 1984 is \(\$1\), CPI in 1984 is \(103.9\), and CPI in 2010 is \(218.1\).

Step2: Substitute the values into the formula

Substitute \( \text{Amount in Year } A = 1 \), \( \text{CPI of Year } A = 103.9 \), and \( \text{CPI of Year } B = 218.1 \) into the formula:

\(\text{Purchasing Power in 2010 dollars}=1\times\frac{218.1}{103.9}\)

Step3: Calculate the value

Calculate \(\frac{218.1}{103.9}\approx2.10\) (rounded to the nearest cent)

Answer:

\(2.10\)