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Shining Faces daycare centre was charging $500 a month for one child when the CPI was...

Shining Faces daycare centre was charging $500 a month for one child when the CPI was 109.8. They put their monthly fee up to $550 a month for one child when the CPI rose to 111.7. What should their monthly fees have risen to if they had simply kept pace with inflation?

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Expert Solution

Infltion = current index / base index

= 111.7/ 109.8

= 1.01730418943533

fee should have been = 500 * 1.01730418943533

= 508.65

fees should have been 508.65

jeff jeffy answered 2 years ago
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