1. Look at Table 13.2 and then Table 13.3: Show formulas and math!

Table 13.2 A College Student's Basket of Goods

Items	Hamburger	Aspirin	Movies	Total	Inflation Rate
Qty	20	1 bottle	5	-	-
(Pd 1) Price	$3.00	$10.00	$6.00	-	-
(Pd 1) Amount Spent	$60.00	$10.00	$30.00	$100.00	-
(Pd 2) Price	$3.20	$10.00	$6.50	-	-
(Pd 2) Amount Spent	$64.00	$10.00	$32.50	$106.50	6.5%
(Pd 3) Price	$3.10	$10.00	$7.00	-	-
(Pd 3) Amount Spent	$62.00	$10.00	$35.00	$107.00	0.5%
(Pd 4) Price	$3.50	$10.00	$7.50	-	-
(Pd 4) Amount Spent

Table 13.3 Calculating Index Numbers When Period 3 is the Base Year

	Total Spending	Index Number	Inflation Rate Since Previous Period
Period 1	$100	100/1.07 = 93.4
Period 2	$106.50	106.50/107 = 99.5	(99.5-93.4)/93.4 = 6.5%
Period 3	$107	107/1.07 = 100.0	(100-99.5)/99.5 = 0.5%
Period 4	$117.50	117.50/1.07 = 109.8	(109.8-100)/100 = 9.8%

a.) Assume there is a Period 5 (Pd 5) and the price of Hamburger is now $4.25, the price of Aspirin is $9.60, and the price of Movies is $10.50. What is the total amount spent in Period 5 on this basket?

b.) What is the percentage change in the cost of purchasing this basket from Period 4 to Period 5?

c.) What is the Index Number for Period 5, using Period 3 as the Base Year?

d.) What is the Inflation Rate over the entire period (Period 1 to Period 5)? Calculate the Inflation Rate Using Index Numbers