Sam is going to ask for a raise. Over the past year, the CPI has gone from 129.9 to 131.9. Sam currently earns $42,500. What is the minimum raise that Sam should ask for in order to maintain the same buying power?

Question

Quizplus · Accepted Answer

To maintain the same buying power, Sam needs to adjust his salary based on the increase in the Consumer Price Index (CPI). The CPI went from 129.9 to 131.9, which is an increase of 2 points. To find the percentage increase: (131.9 - 129.9) / 129.9 = 0.01539, or 1.539%. To maintain the same buying power, Sam's salary needs to be increased by 1.539% of $42,500, which is $654.075. Adding this to his current salary gives $42,500 + $654.075 = $43,154.075, which rounds to $43,154.

Sam Is Going to Ask for a Raise