An employee has an annual salary of $40,000 but is told that she will be given a 10% cut in pay because of declining company profits. She is also told that next year, she will be given a 10% raise. This doesn't seem too bad because the 10% cut seems to be offset by the 10% raise.
a. What is the annual income after the 10% cut?
b. Use the annual income from part (a) to find the annual income after the 10% raise. Did the 10% cut followed by the 10% raise get the employee back to an annual salary of $40,000?