Question

Assume you earned $50000 in 2015, when the consumer price index (CPI) was 236. The CPI in 2016 is 246. How much of a raise in 2016 do you need, in dollars, to keep up with the change in the inflation rate

Answer 1

Answer:

$2,118.64 and 4.24%

Explanation:

The computation is shown below:

Data given in the question

Earning in 2015 = $50,000

CPI in 2015 = 236

CPI in 2016 = 246

So, the earning in 2016 is

= Earning in 2015 × CPI 2016 ÷ CPI 2015

= $50,000 × 246 ÷ 236

= $52,118.64

So, the raise amount is

= $52,118.64 - $50,000

= $2,118.64

And, the percentage is

= $2,118.64 ÷ $50,000 × 100

= 4.24%