In 1969, Malcolm bought a Pontiac Firebird for $2,500. If the price index was 36.7 in 1969 and the price index was 235 in 2013, then what is the price of the Firebird in 2013 dollars?

a. $4,609.57

b. $4,957.5

c. $13,508.17

d. $16,008.17

Option (d) $16,008.17

Explanation:

Data provided in the question:

The price of the Firebird in 1969 = $2,500

Price index in 1969 = 36.7

Price index in 2013 = 235

Now,

The price of the Firebird in 2013 dollars will be

= [ Price index in 2013 : Price index in 1969 ] * The price of the Firebird in 1969

= [ 235 : 36.7 ] * $2,500

= 6.40327 * $2,500

= $16,008.17

Hence,

Option (d) $16,008.17