Need help figuring out Consumer Price Index?

You should use the base year = 100 or 1 for CPI, and then calculate the price in the year you want. For example, gas price in 1960=x, CpI=100, the gas price in 1983 which CPI=y will be (y multiplied by x)/100.

You use the formula:

Gas Price (in 1960)  x  CPI (in 1983) / CPI (in 1960)

So if the CPI in 1983 is 250, then the price of gas in 1960 in 1983 dollars is:

$0.31   x   250  /  30

I don't know what the cpi for 1983 is so you would have to change your formula to reflect this.

Just divide the price by the CPI to get price in base year dollars.  The question states that 1983 is the base year, so you are using CPI = 100 for the dollars you are converting to.

1960 price = $0.31; 1960 CPI = 30 (when you divide, move the decimal back 2 spaces because base year = 100)

$0.31/.3 = $1.03 1/3

This would be the 1960 price of gasoline stated in 1983 dollars.

Another way to look at it: to equate 1960 prices to 1983 prices, divide each year's price by it's CPI and set them equal.  Then you have the formula to solve:

$0.31/30 = x/100
31=30x
x=31/30
x=$1.03.......