Jill has an escalator clause in her labor contract that gives her a raise equal to the change in the consumer price index (CPI). Last year she earned $40,000 and the CPI was 100. If the CPI this year is 110, her new salary is
A) $40,100.
B) $40,110.
C) $44,000.
D) $50,000.

Question

Quizplus · Accepted Answer

The CPI increase from 100 to 110 represents a 10% increase. To calculate the new salary: $40,000 * 10% = $4,000. Adding this to the original salary gives $40,000 + $4,000 = $44,000.

Jill Has an Escalator Clause in Her Labor Contract That