The inflation index for the year 1989 relative to the year 1970 was 3.56, indicating that, on the average, for each dollar spent in 1970 for goods, $3.56 had to be spent for the same goods in 1989. If the price of a Model K mixer increased precisely according to the inflation index, what was the price of the mixer in 1970?
(1) The price of the Model K mixer was $102.40 more in 1989 than in 1970.
(2) The price of the Model K mixer was $142.40 in 1989.
[spoiler]OA=D[/spoiler]
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The inflation index for the year 1989 relative to the year
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We know that the ratio of the price of the mixer in 1989 to the price in 1970 was 3.56 to 1. Notice then that for every dollar the mixer cost in 1970, the price increased by $2.56.
So if the actual increase was $102.40, the cost in 1970 must have been 102.40/2.56, and Statement 1 is sufficient.
Since we know the price increased by a factor of 3.56, if the price in 1989 was 142.40, the price in 1970 must have been 142.40/3.56, and Statement 2 is also sufficient.
So if the actual increase was $102.40, the cost in 1970 must have been 102.40/2.56, and Statement 1 is sufficient.
Since we know the price increased by a factor of 3.56, if the price in 1989 was 142.40, the price in 1970 must have been 142.40/3.56, and Statement 2 is also sufficient.
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