The following price index is available for a product:  Year  Price index  1 (base year)  100 2 106.4 3 109.5 4 116.3 5 120.5 If the price was £872 in Year 2, what is the price of the product in Year 5 (to 2 decimal places)?  a. 769.97  b. 959.60  c. 844.46  d. 987.56

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter8: Economic Fluctuations, Unemployment, And Inflation
Section: Chapter Questions
Problem 12CQ
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The following price index is available for a product: 

Year 

Price index 

1 (base year) 

100

2

106.4

3

109.5

4

116.3

5

120.5

If the price was £872 in Year 2, what is the price of the product in Year 5 (to 2 decimal places)? 

a. 769.97

 b. 959.60

 c. 844.46 

d. 987.56 

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