Question

Rick Palmer received a $2,500 raise this year. This increased his salary as an associate TV producer from $45,000 to $47,500. What percentage increase in nominal income did Rick receive?

Answer 1

Answer: Rick had a 5.55% nominal salary Increase.

Explanation: In Finances & Economics , Nominal value is measured in terms of money . This means that the value has not been adjusted against inflation and will only show the "Number Value" rather than the economic value which is how much purchase power this salary increase really means.

The formula to calculate the % for this nominal increase is : (Final Value - Initial Value) / Initial Value * 100 ==>> ($47500-$45000)/$45000 = 0.55 *100 ===> 5.5%