Question

Dave brags to his dad that his $45,000 starting salary as a computer programmer is much higher than his dad's $28,000 starting salary some years ago. if the consumer price index the year dave begins work is 180.5 and the year his dad started work it was 110.8, dave is:

Answer 1

Using the two cpi's for Dave's Dad and Dave of 110.8 and 180.5, the increase is 1.62 so it is necessary to multiply Dave's Dad's salary of $28,000 x 1.62 getting $45,613 so actually his starting salary in present terms was a little more than Dave is getting now, or $45614.