Question

1.) 1973-1974 my salary was $28,174 but in 2001-2002 my salary was $52,288 - what %...

1.) 1973-1974 my salary was $28,174 but in 2001-2002 my salary was $52,288

- what % did my salary increase bewteen 1973-1974 and 2001-2002
-in January 1973 the cpi stood at 131.6 but in January 2001 it was 252.14. Over the time period of 28 years what is the inflation rate.
-using the inflation rate what would be the my salary in 1973-1974 in 2001 dollars
- what % did my salary increase between 1973-1974 and 2001-02. Using constant dollars.
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Answer #1

salary in 1973-74

28174

salary in 2001-02

52288

increase in salary

52288-28174

24114

% increase in salary between 1973-74 to 2001-02

24114/28174

85.59%

CPI in 1973

131.6

CPI in 2001

252.14

Inflation in %

(252.15/131.6)^(1/28)-1

2.35%

salary in 2001

salary in 1973-74*(1+inflation rate)^n

28174*(1.0235)^28

53989.37

% increase in salary

salary in 2001-salary in 1973-74/ salary in 1973-74

(53989.37-28174)/28174

91.63%
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