CPI Calculations

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CPI Calculations

• By Professor Jermaine Whirl, MBA, ED.M
• For Students of East Georgia College

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CPI

• CPI Expenditures in the Current year divided by
  Expenditures in the base year 100.
• In 2008 (900/750)100120
• In 2009 (915/750) 100122

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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.

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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
• Nike Air Force Shoes 1985- 54.90
• Chrysler Town and Country 3678 in 1946
• New Home (3 Bedrooms) in 1960 was 12, 700
• Hair Dryer 5.95 in 1959

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CPI Data
Example What is the price of 2 milk in today's
prices? Product is 2 Milk in 1987 Cost
1.59 Equation is CPI of Current Year/ CPI of
Base Year the Price of the product in
question. CPI in 2007 is 208.3 CPI in 1987 is
113.6 Therefore we'll divide (208.3 / 113.6)
1.59 Price of milk today for this same product
would be 2.91