The price of a typical laptop computer has fallen from $2,000 in 1985 to $800 today. At the same time the consumer price index has risen from 100 to 250.

Question

Adjusting for inflation,how much did the price of laptops change? Does this answer seem right to you, or is it missing something?

Answer 1

The CPI has risen from 100 to 250. This means 2000 dollars in 1985 would be the equivalent of (250/100)*2000 today or $5,000 today. that says the Current price of a laptop is 800/5000 16% of what they used to be. or that prices have fallen by 84%. This is actually a huge understatement as computeing power in the new laptops is many many many times better. Hard drives are many thousands of times larger. I would say computing costs are less than 1% of what they were in 1985. I know. I bought a top of the line computer in 1985 while I was a professor at Tufts