Given the following figures, by approximately what percentage did Aiden's real income increase between 2004 and 2005? Aiden's 2004 money income = $50,000
Aiden's 2005 money income = $55,000
2004 CPI = 120.0
2005 CPI = 128.0
A) zero
B) 3.1 percent
C) 6.7 percent
D) 10 percent

Question

Quizplus · Accepted Answer

To find the real income increase, adjust the incomes for inflation using the CPI. Real income in 2004 = $50,000 / 120 = $416.67. Real income in 2005 = $55,000 / 128 = $429.69. The percentage increase is (($429.69 - $416.67) / $416.67) * 100% ≈ 3.1%.

Given the Following Figures, by Approximately What Percentage Did Aiden's