Question

Today, Jennifer earns $55000 at her first job. Her mom used to make $15,000 at her first job in 1975. Jennifer is of the opinion that she makes more than her mom would have made if she started working today. Her mom thinks Jennifer would have earned less than she if Jennifer had started working in 1975. If the CPI today is 231 and the CPI in 1975 was 82, then Choose one or more: A. Jennifer is correct. Her mom’s salary in today’s dollars would be $42256. B. Jennifer is wrong. Her mom’s salary in today’s dollars would be $5325. C. Jennifer’s mom is correct. Jennifer’s salary in 1975 dollars would have been $154939. D. Jennifer’s mom is wrong. Jennifer’s salary in 1975 dollars would have been $19524.

Answer 1

A. Jennifer is correct. Her mom’s salary in today’s dollars would be $42256.

Step-by-step explanation:

purchase power relationship between 1975 and today:

`(CPI_(today))/(CPI_(1975))`

231/82 = 2.817073

Purchase power of 15,000 dollars of 1975 today:

15,000 x 2.817073 = 42,256.09756 = $42,256

As jenifers salary today is 50,000 She is corect, It is earning more than his mother at her first job