In 2008, Cameron began his career with SBC. His starting salary was $32,000. By 2011, his salary increased to $35,000. If the CPI was 100.0 in 2008 and 107.5 in 2011, Cameron's 2011 real income is

Question

Quizplus · Accepted Answer

First, we need to adjust Cameron's 2008 salary for inflation using the CPI.

Adjusted 2008 salary = (CPI in 2011/CPI in 2008) x 2008 salary 
= (107.5/100) x $32,000 
= $34,400

Now we compare the adjusted 2008 salary with Cameron's actual 2011 salary to find his real income:

Real income = higher of (adjusted 2008 salary, actual 2011 salary) 
= max($34,400, $35,000) 
= $35,000

Therefore, the answer is B) $32,558.

In 2008, Cameron Began His Career with SBC