When Sue graduated from college, she got a job with a starting salary of $30,000. When Sue's sister Jan graduated five years later, her starting salary was $38,000. Jan likes to tease Sue about earning more than Sue did right out of college. Sue claims that she actually had a higher salary in real dollars. The Consumer Price Index rose 12 percent during the five years separating the sisters' graduations.

Therefore, we can conclude that:

a. Sue earned a higher real salary.

b. Jan earned a higher real salary.

c. both Sue and Jan earned the same real salary.

d. There isn't enough information to determine who earned the higher real salary.

b. Jan earned a higher real salary.

Explanation:

The consumer price index rose 12 percent which means that with the same amount of money 5 years later you will be able to buy 12% less goods and services. Now in order to find who earned a higher real salary we will calculate how much higher was Jan's salary compared to SUE. If the difference in salary was more than 12% than Jan earned a higher real salary, if less than 12% then Sue earned a higher real salary and if = 12% then both earned the same amount of real salary.

Difference in salary = 38,000-30,000=8,000

Percentage increase in salary = 8,000/30,000=0.266 = 26.6%

Jan earned 26.6% more than Sue and the increase in the price index was 12% which means that Jan earned a higher real salary than Sue.