Rick Palmer received a $2,500 raise this year.This increased his salary as an associate TV producer from $45,000 to $47,500.What percentage increase in nominal income did Rick receive?
A)2.5 percent
B)5.3 percent
C)5.6 percent
D)7.8 percent

Question

Quizplus · Accepted Answer

To find the percentage increase in nominal income, we can use the following formula:

Percentage increase = (Amount of increase / Original amount) x 100%

In this case, Rick's amount of increase is $2,500, and his original salary was $45,000. Therefore:

Percentage increase = (2,500 / 45,000) x 100%
Percentage increase = 0.056 x 100%
Percentage increase = 5.6%

Therefore, Rick received a 5.6% increase in nominal income. The correct answer is C.

Rick Palmer Received a $2,500 Raise This Year