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Henry Ford paid his workers $5 a day in 1914 when the CPI was 1. Today...

Henry Ford paid his workers $5 a day in 1914 when the CPI was 1. Today with the price index at 177 the $5 a day is worth how much?

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Answer #1

The daily payment amount ($5) should be divided by the price index of 1914, which is 1, and multiplied by the price index of today, which is 177, to get the answer.

$5 in today’s price index = (1914’s pay / 1914’s index) × Today’s index

                                          = ($5 / 1) × 177

                                          = $885 (Answer)

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