Suppose that the average income in 1954 was 1,050£. Suppose further that the CPI in 1954 was 35.3, and that the CPI in 2021 is 1,021.5. What is the 2020 value of the 1954 average income?

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 9MC: Will the effective annual rate ever be equal to the nominal (quoted) rate?
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Suppose that the average income in 1954 was 1,050£. Suppose further that the CPI in 1954 was 35.3, and that the CPI in 2021 is 1,021.5. What is the 2020 value of the 1954 average income? 

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