Question

A Union worker is to see an increase in pay of 2.5% per year next year. Her salary is $41,000 yr. If inflation was predicted

to be 1.9% for the upcoming year, how much more purchasing power would she have in dollars next year?

Answer 1

The Union worker will have $246 more in purchasing power next year.

Step-by-step explanation:

To calculate the increase in purchasing power, we need to subtract the inflation rate from the pay increase percentage.

So, the increase in purchasing power will be 2.5% - 1.9% = 0.6%.

To find the amount in dollars, we will multiply the increase in purchasing power with the current salary.

So, the increase in purchasing power in dollars will be $41,000 * 0.006 = $246.

Therefore, the Union worker will have $246 more in purchasing power next year.