When Sue graduated from college, she got a job with a starting salary of $30,000. When Sue's sister Jan graduated five years later, her starting salary was $38,000. Jan likes to tease Sue about earning more than Sue did right out of college. Sue claims that she actually had a higher salary in real dollars. The Consumer Price Index rose 12 percent during the five years separating the sisters' graduations.
Therefore, we can conclude that:

a. Sue earned a higher real salary.
b. Jan earned a higher real salary.
c. both Sue and Jan earned the same real salary.
d. There isn't enough information to determine who earned the higher real salary.

The consumer price index rose 12 percent which means that with the same amount of money 5 years later you will be able to buy 12% less goods and services. Now in order to find who earned a higher real salary we will calculate how much higher was Jan's salary compared to SUE. If the difference in salary was more than 12% than Jan earned a higher real salary, if less than 12% then Sue earned a higher real salary and if =12% then both earned the same amount of real salary.

Difference in salary = 38,000-30,000=8,000

Percentage increase in salary = 8,000/30,000=0.266 =26.6%

Jan earned 26.6% more than Sue and the increase in the price index was 12% which means that Jan earned a higher real salary than Sue.