Explanation Calculation: It is given that in 1980, the average annual cost was $5,600 and in 2015, the cost is $43,921. Consumer price index: Consumer price index is a measure of price of goods, services and housing costs for more than 60,000 samples. Procedure of finding the index number: The observation corresponding to the particular time will be considered as ‘reference value’ and the given observation is considered as ‘value’. The index number can be found as, Index number = value reference value × 100 For normal goods: From the table 2.2, the CPI for 1980 is 82.4 and the CPI for 2015 is 237. Here, the index of 2015 can be calculated as, Index number = CPI of 2015 CPI of 1980 = 237 82

Statistical Reasoning for Everyday Life - MyStatLab

5th Edition

ISBN: 9781323823781

Author: Bennett

Publisher: PEARSON

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Chapter 2.4, Problem 13E

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Compare the increase in the cost of college to the increase in cost corresponding to CPI.

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Statistical Reasoning for Everyday Life - MyStatLab

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Compare the increase in the cost of college to the increase in cost corresponding to CPI.

Solution Summary: The author compares the cost of college to the increase in cost corresponding to CPI, and concludes that it has increased more than price goods, services and housing costs from 1980 to 2015.

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