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Question 600982: Suppose that in 1990, the average plane ticket from New York to San Francisco was $240 but rose to a price of $430 by 2007. Determine the relative change in price from 1990 to 2007, and then refer to the chart to compare this change to the overall rate of inflation according to the CPI.
Average Annual Consumer Price Index
Year CPI Year CPI
1990 130.7 2000 172.2
1991 136.2 2001 177.1
1992 140.3 2002 179.9
1993 144.5 2003 184.0
1994 148.2 2004 188.9
1995 152.4 2005 195.3
1996 156.9 2006 201.6
1997 160.5 2007 207.3
1998 163.0 2008 215.3
1999 166.6
I got 80%. But I am not sure what else to do.
Answer by jim_thompson5910(35256)   (Show Source):
You can put this solution on YOUR website! I'm not exactly sure how CPIs work, but my guess is that you're comparing this 80% increase with the percentage increase of the CPIs over this time period.
This percentage increase is...
Percent Increase = [(New - Old)/Old] * 100
Percent Increase = [(215.3-130.7)/130.7] * 100
Percent Increase = [84.6/130.7] * 100
Percent Increase = 0.647283856159143 * 100
Percent Increase = 64.7283856159143%
So in 1990, the CPI was 130.7 and over this entire time period, it increased to 215.3 in 2008. This percentage increase was roughly 64.73%
Compare this with the percentage increase of the price of the plane ticket and you can see that the price of the plane ticket clearly grew more.
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