# CPI Calculations

Document Sample

```					      CPI Calculations

By: Professor Jermaine Whirl
For Students of East Georgia College
CPI
• CPI= Expenditures in the Current year
divided by Expenditures in the base year *
100.
• In 2008 (\$900/750)*100=120
• In 2009 (\$915/750)* 100=122
Calculating Inflation Based of CPI
• 2008 Index was 120
• 2009 Index was 122
• (122-120)/120* 100= and Inflation Rate of
1.7%
• This tells us that prices increased 1.7% between
this time period.
• Remember the equation (New CPI-Old CPI)/
Old CPI * 100= Inflation Rate.
Calculation of Prices in today's dollars
compared to past years.
•   2% milk \$1.59 a gallon Iowa 1987
•   Bunk Beds with Mattress \$148
•   Pontiac Grand 1980 AM \$9,965
•   Cheer Laundry Detergent \$1.59
•   Gallon on Gas \$1.19 1989
•   Nike Air Force Shoes 1985- \$54.90
Year CPI
2007 208.3
2006 201.6
Inf. Rate
(July)
3.2
CPI Data
Year     CPI      Inf. Rate

2005 195.3      3.4
2004 188.9      2.7                       Example:
2003 184.0      2.3
2002 179.9      1.4       What is the price of 2% milk in today's
2001 177.5      2.9
2000 172.5      3.5                       prices?
1999 166.6      2.1
1998 163.1      1.6       Product is 2% Milk in 1987; Cost \$1.59
1997 160.5      2.3
1996 156.9      3.0       Equation is CPI of Current Year/ CPI of
1995 152.4      2.8       Base Year * the Price of the product in
1994 148.2      2.6
1993 144.5      3.0                     question.
1992 140.3      3.0
1991 136.2      4.2
1990 130.7      5.4
1989 124.0      4.8       CPI in 2007 is 208.3; CPI in 1987 is 113.6
1988 118.3      4.1
1987 113.6      3.6                Therefore we'll divide
1986 109.6      1.9
1985 107.6      3.6                 (208.3 / 113.6) * 1.59
1984 103.9      4.3
1983   99.6     3.2          Price of milk today for this same
1982   96.5     6.2              product would be \$2.91
1981   90.9    10.3
1980   82.4    13.5

```
DOCUMENT INFO
Shared By:
Categories:
Stats:
 views: 12 posted: 5/12/2010 language: English pages: 5