If Kim's salary was $50,000 last year, and this year she receives a cost-of-living increase tied to the consumer price index (CPI), what will her salary be this year assuming the CPI has risen from 110 to 114?
A) $49,114
B) $50,114
C) $50,300
D) $51,818

Question

Quizplus · Accepted Answer

First, calculate the percentage increase in CPI: (114-110)/110 = 0.036 or 3.6%
Next, apply that same percentage increase to Kim's salary:
$50,000 x 1.036 = $51,818. Thus, Kim's new salary will be $51,818.

If Kim's Salary Was $50,000 Last Year, and This Year