Assume that the professors at a local college have gone without a pay increase for 4 years during a tough time.Suppose that things start to look up and the President of the college wants to make up for lost time.If the CPI in 2002 was 150 and 175 in 2006,how much will salaries have to increase to bring the faculty back up to their real income from 2002?
A) 175.0%
B) 150.0%
C) 25.0%
D) 16.7%
E) 14.3%

Question

Quizplus · Accepted Answer

To calculate the percentage increase in salaries, we need to use the formula:

(New CPI/Old CPI) x 100% = Percentage increase

Plugging in the numbers, we get:

(175/150) x 100% = 116.7%

This means that the cost of living has increased by 16.7% since 2002. To bring the faculty back up to their real income from 2002, their salaries would need to increase by the same amount. Therefore, the answer is D) 16.7%.

Assume That the Professors at a Local College Have Gone