Question

a)if a car cost $17,000 in 2010 use the inflammation rate of 164.68% to estimate what the car would have cost in 1980
b)If a pair of jeans cost $80 in 2010 use the inflammation rate of 66.8% to estimate the cost of the jeans would have been in 1990

Answer 1

a ) Car costs in year 2010 : $17,000
cost of car in year 1980 = P.

Cost P of cars increased at the rate 164.68% over the whole of (2010-1980) = 30 years.

Inflation or increase in the price of car = P * 164.68% in 2010 over the price in 1980

Total price of car in 2010 = Price in 1980 + P* 164.68/100
                                     = P + P * 1.6468 = P * 2.6468
                                     = $ 17,000

P = $ 17,000/2.6468 = $ 6, 422.85


b) A pair of jeans cost $ 80 in 2010
   Inflation rate is 66.8 % between 1990 and 2010, with the base rate being the cost price in 1990.  That means the price increased by 66.8% in 20 years from 1990.
 
  Cost price in 1990 = CP  let us say
  Increase in price due to inflation: 66.8 % of CP
                    = 66.8/100 * CP = 0.668 CP

  Cost price of jeans in 2010  = CP + increase due to inflation
                                     = CP + 0.668 CP  = 1.668 CP

  So 1.668 CP = $ 80
   CP = $80/1.668 = $ 47.96  or  $ 47  rounded off.