Sam is going to ask for a raise. Over the past year, the CPI has gone from 129.9 to 131.9. Sam currently earns $42,500. What is the minimum raise that Sam should ask for in order to maintain the same buying power?

A) $43,350
B) $43,144
C) $44,000
D) $43,500
E) $43,154

Question

vicmarie simpri · Accepted Answer

Final Answer : E, Explanation :  To maintain the same buying power, Sam needs to adjust his salary based on the increase in the Consumer Price Index (CPI). The CPI went from 129.9 to 131.9, which is an increase of 2 points. To find the percentage increase: (131.9 - 129.9) / 129.9 = 0.01539, or 1.539%. To maintain the same buying power, Sam's salary needs to be increased by 1.539% of $42,500, which is $654.075. Adding this to his current salary gives $42,500 + $654.075 = $43,154.075, which rounds to $43,154.

Sam is going to ask for a raise. Over the past year, the CPI has gone from 129.9 to 131.9. Sam currently earns $42,500. What is the minimum raise that Sam should ask for in order to maintain the same buying power?

A) $43,350
B) $43,144
C) $44,000
D) $43,500
E) $43,154

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Learning Objectives

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Sam is going to ask for a raise. Over the past year, the CPI has gone from 129.9 to 131.9. Sam currently earns $42,500. What is the minimum raise that Sam should ask for in order to maintain the same buying power?A) $43,350B) $43,144C) $44,000D) $43,500E) $43,154

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Learning Objectives

Learning Objectives

Related questions

Sam is going to ask for a raise. Over the past year, the CPI has gone from 129.9 to 131.9. Sam currently earns $42,500. What is the minimum raise that Sam should ask for in order to maintain the same buying power?

A) $43,350
B) $43,144
C) $44,000
D) $43,500
E) $43,154