An engineer in 1950 was earning $5,700 a year. In 2020, she earned $93,000 a year. However,
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Question:
An engineer in 1950 was earning $5,700 a year. In 2020, she earned $93,000 a year. However, on average, prices in 2020 were higher than in 1950.
What was her real income in 2020 in terms of constant 1950 dollars?
Use the data in Table 5.8.
Note: Round your answer to 2 decimal places.
What is the real income in 2020?
TABLE 5.8 The consumer price index (CPI) shows how inflation has increased the cost of a typical family's purchases.
CPI | Percent Change since 1950 | |
---|---|---|
1950 | 25.0 | |
1960 | 29.8 | + 19.2% |
1970 | 39.8 | + 59.2 |
1980 | 86.3 | +245.2 |
1990 | 133.8 | +435.2 |
2000 | 174.0 | +596.0 |
2010 | 219.2 | +776.8 |
2020 | 262.0 | +948.1 |
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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