Using CPI to Adjust for Inflation

11. Gross Domestic Product (GDP) and Consumer Price Index (CPI) / Using CPI to Adjust for Inflation / Problem 5

Problem 5

A gallon of milk cost \$1.20 in 1990 when the CPI was 130.7. If the CPI in 2020 is 258.8, what is the equivalent cost of the milk in 2020 dollars?

\$2.38

\$2.50

\$2.00

\$1.80