Question

If the CPI was 207 in 2009 and 225 in​ 2013, what wage would someone who earned a​ $50,000 income in 2009 have to earn in 2013 in order to keep her purchasing power​ constant?

Answer 1

Answer:

$54,348

Explanation:

Given:

Consumer Price Index in 2009 = 207

Consumer Price Index in 2013 = 225

Income in 2009 = $50,000

Income in 2013 = ?

Computation of Income in 2013:

Income in 2013 = Income in 2009 x (Consumer Price Index in 2013 / Consumer Price Index in 2009)

= $50,000 x (225 / 207)

= $50,000 x 1.08695652

= $54,347.826

= $54,348 (Approx)