Problem on average retail price and the Consumer Price Index

Table indicate the average retail price of milk and the Consumer Price Index in the year 1980 -1998.

1010_Average retail price and the consumer Price Index.png

Alter the CPI into 1990 = 100 and find out the real price of milk in the year of 1990 dollars.
To alter the CPI into 1990=100, divide the CPI for each year by the CPI for 1990. Employ the formula from part a & the new CPI numbers below to determine the real price of milk.
          New CPI            1980 63 Real price of milk      1980   $1.67
                                 1985 82     1985   $1.38
                                 1990 100 1990   $1.39
                                 1995 117                                                                 1995   $1.26
                                 1998 125 1998   $1.29

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