In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics show a consumer price index of 15.2 for 1931 and 237 for 2015. President Hoover's 1931 salary was equivalent to a 2015 salary of aboutSingle choice
A
$4,965.
B
$1,057,894.
C
$16,080,001.
D
$1,169,408.

Question

In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics show a consumer price index of 15.2 for 1931 and 237 for 2015. President Hoover's 1931 salary was equivalent to a 2015 salary of aboutSingle choice

A

$4,965.

B

$1,057,894.

C

$16,080,001.

D

$1,169,408.

BlackTom AI · Accepted Answer

Use CPI adjustment: equivalent modern salary = 1931 salary × (CPI_2015 / CPI_1931).

1) Relevant concepts
The Consumer Price Index (CPI) measures the average price level; to convert a past dollar amount into equivalent present dollars, multiply by the ratio of the later CPI to the earlier CPI. This preserves purchasing power.

2) Step-by-step reasoning and calculations
Given: 1931 salary = $75,000; CPI_1931 = 15.2; CPI_2015 = 237.

Compute the CPI ratio:
237 ÷ 15.2 = 2370 ÷ 152 = 1185 ÷ 76 = 15.592105263157895 (approx).

Multiply the 1931 salary by this ratio:
$75,000 × 15.592105263157895
= $75,000 × 15 + $75,000 × 0.592105263157895
= $1,125,000 + $44,407.8947368421
= $1,169,407.8947368421

Round to the nearest dollar: $1,169,408.

3) Why this is correct
This calculation uses the standard CPI-based conversion method so that the amount reflects the same purchasing power in 2015 dollars as $75,000 did in 1931. The arithmetic steps show the precise ratio and multiplication.

4) Why the other choices are incorrect
- $4,965 is far too small (would result from dividing instead of multiplying or using an incorrect ratio).
- $1,057,894 is smaller than the correct value; it likely comes from an arithmetic error or using a slightly different CPI ratio.
- $16,080,001 is an order of magnitude too large, indicating a wrong factor or misplacement of a decimal.

Conclusion: The correct 2015 equivalent is $1,169,408, which matches the provided answer.

In 1931, President Herbert Hoover was paid a salary of $75,000. Government statistics show a consumer price index of 15.2 for 1931 and 237 for 2015. President Hoover's 1931 salary was equivalent to a 2015 salary of aboutSingle choice

Similar Questions

2. A typical flying car costs about Answer Question 2[input] times more than a regular car.

2. A typical flying car costs about Answer Question 2[input] times more than a regular car.

A product has a sales price of $150 and a per-unit contribution margin of $50. What is the contribution margin ratio? Please answer to 2 decimal places

Basic proportions for boiling long grain white rice are

A firm has a total debt ratio of 0.30 times. This means the firm has Blank ______ in total debt for every $1 in total assets.

When building a mini-boat, a boat builder uses 1 pound of wood and 2 ounces of glue. If he/she has 9 pounds of wood and 6 ounces of glue, how many mini-boat(s) will he/she be able to build?

In a 1050-room competitive set, Hotel A has 300 rooms. Hotel B has 350 rooms, and Hotel C has 400 rooms. During a recent 30-day period in which the entire competitive set sold 25,400 rooms, Hotel A sold 8,000 rooms. Which of the following statements is indisputably TRUE?

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler