Question

Marla Opper currently earns $95,000 a year and is offered a job in another city for $118,000. The city she would move to has 11 percent higher living expenses than her current city.

What amount must Marla earn in the new city to maintain her current buying power?

Answer 1

Since living expenses are 11% higher in the new city. Marla would need an 11% increase in her current income to maintain her current buying power when moving. We can solve this by simply multiplying her current income by 11%.

Explanation:

`95,000*1.11 = 105,450`

If we multiply her current income of $95,000 by 11% we see that Marla would need an income of $105,450 in order to maintain her buying power in the new city. Since her new job offer is paying $118,000 she will have more buying power in the new city.

Answer: Marla must earn an Income of $105,450 to maintain her buying power.