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17 December, 23:06

10.

John Wong makes $63,800 per year maintaining a self-storage business.

He was notified of a 3.3% raise in a year in which the CPI index increased

by 4.4%.

Find the gain or loss in his purchasing power.

loss of $701.80

gain of $701.80

loss of $2105.40

gain of $2105.40

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Answers (1)
  1. 17 December, 23:32
    0
    Answer: loss of 701.80

    Explanation:

    Salary of John = 63,800

    Raise in salary is 3.3%

    New salary = (3.3%) (63800) = (3.3) (63800) / 100 = 2105.4

    Since, Cpi index has raise of 4.4%

    So for keeping the purchasing power same, updated salary should have been (4.4%) (63800) = (4.4) (63800) / 100 = 2807.2

    So, change in salaries is (2807.2 - 2105.4) = 701.80

    He is in loss as he got raise less than the CPI index.
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