suppose the current cost of gasoline is $2.82 per gallon. find the current price index number, using the…

suppose the current cost of gasoline is $2.82 per gallon. find the current price index number, using the 1975 price of 56.7 cents as the reference value.\nthe current price index number is \n(round to one decimal place as needed.)

suppose the current cost of gasoline is $2.82 per gallon. find the current price index number, using the 1975 price of 56.7 cents as the reference value.\nthe current price index number is \n(round to one decimal place as needed.)

Answer

Explanation:

Step1: Convert cents to dollars

Since 1 dollar = 100 cents, 56.7 cents = $\frac{56.7}{100}=0.567$ dollars.

Step2: Calculate the price - index number formula

The price - index number formula is $I=\frac{P_1}{P_0}\times100$, where $P_1$ is the current price and $P_0$ is the reference price. Here, $P_1 = 2.82$ dollars and $P_0=0.567$ dollars. $I=\frac{2.82}{0.567}\times100$.

Step3: Perform the calculation

$\frac{2.82}{0.567}\approx4.9735$, and $4.9735\times100 = 497.4$.

Answer:

497.4