in 1975 the price of gasoline per gallon was 543 with the 19

in 1975 the price of gasoline per gallon was 54.3. with the 1975 price as the reference value, the gasoline price index for 1998 is 196.6. what was the cost of a gallon of gasoline in 1998?

Solution

Index value at the base year = 100

so, 100 corresponds to 54.3

likewise 196.6 should correspond to 54.3 * 196.6 / 100

= 106.75

Cost of gasoline in 1998 = 106.75

Hope this helps.