In 1954,Canadian Prime Minister Louis Stephen St.Laurent was paid a salary of $15 000.Stephen Harper,the Prime Minister in 2012,was paid $157 731.The price index for 1954 is 14.1 and the price index for 2012 is 121.7.What is,approximately,Prime Minister St.Laurent's salary equivalent in 2012 dollars?

Question

In 1954,Canadian Prime Minister Louis Stephen St.Laurent was paid a salary of $15 000.Stephen Harper,the Prime Minister in 2012,was paid $157 731.The price index for 1954 is 14.1 and the price index for 2012 is 121.7.What is,approximately,Prime Minister St.Laurent's salary equivalent in 2012 dollars?

Quizplus · Accepted Answer

To find the equivalent salary in 2012 dollars, we need to adjust for inflation using the price indices.

First, we need to adjust Prime Minister St. Laurent's salary from 1954 dollars to 2012 dollars:

$15 000 x (121.7/14.1) = $129 056.74 (rounded to the nearest cent)

Therefore, Prime Minister St. Laurent's salary in 2012 dollars is approximately $129 057.

The closest answer choice is C) $129 500.