Transportation equipment that was purchased in 2010 for 2000

Transportation equipment that was purchased in 2010 for $200,000 must be replaced at the end of 2016. The cost index in 2010 was 223 and it is 293 in 2016. What is the estimated cost of the replacement?

Answer
Cost in 2016 dollar=(cost of 2010 *price index of 2016)/Price index of 2010
=(200000*293)/223
=262780.269
The approximate replacement cost is $262780