Harry's salary in 2005 was $58,000 at a time when the CPI was at 104.2. If the CPI in 2010 was 125, then Harry's salary would have to be 64,000 to keep up with inflation.

Question

Quizplus · Accepted Answer

To adjust for inflation, Harry's 2005 salary should be multiplied by the ratio of the 2010 CPI to the 2005 CPI: $58,000 * (125 / 104.2) = $69,563. This means $64,000 would not fully keep up with inflation.

Harry's Salary in 2005 Was $58,000 at a Time When