Which of the following is the value of annual real income for an annual salary of $85,000 when the CPI is 125?
A)$680 per annum
B)$106 250 per annum
C)$68 000 per annum
D)None of these choices are correct.

Question

Quizplus · Accepted Answer

To find the annual real income, we need to adjust the nominal income ($85,000) for inflation. We do this by dividing the nominal income by the CPI and then multiplying by 100:

Real income = (nominal income / CPI) x 100

Real income = ($85,000 / 125) x 100

Real income = $68,000

Therefore, the answer is C.

Which of the Following Is the Value of Annual Real