A 10 HP motor last 5 years ago cost 700 That same motor cost

A 10 HP motor last 5 years ago cost $700. That same motor costs $1000 today. CEPCI value today is 570, what was the CEPCI index value 5 years ago? If the

Solution

C_t = C₀ * ( I_t / I₀ )

here, C_t = estimated cost at present time t

        C₀ = Cost at previous time (here it is 5 years ago)

       I_t = Index value at present time t

         I₀ = Index value at base time ( here it is 5 years ago)

here C_t = $1000

       C₀ = $700

        I_t = 570

we have to find I₀

1000 = 700 *( 570 / I₀ )

I₀ = ( 700 * 570) / 1000

     = 399