Sharisse brags to her mother that her starting salary as a management trainee is $36,000,much higher than her mother's starting salary of $21,000 as a management trainee several years ago.If the CPI the year Sharisse begins work is 181.2 and the CPI the year her mother started work was 109.1,Sharisse is

Question

Quizplus · Accepted Answer

To compare the salaries of Sharisse and her mother in terms of their purchasing power, we need to adjust for inflation. We can do this using the CPI (Consumer Price Index). Sharisse's starting salary of $36,000 needs to be adjusted for the increase in prices from the CPI of her mother's starting year (109.1) to Sharisse's starting year (181.2).

Adjusted salary = (Starting salary/Initial year CPI) x Current year CPI
Sharisse's adjusted salary = (36,000/109.1) x 181.2 = $59,638.66
Her mother's adjusted salary = 21,000

Adjusting for price changes, we can see that Sharisse's starting salary of $36,000, when adjusted for inflation, is actually worth more than her mother's starting salary of $21,000. Therefore, choice C is correct.

Sharisse Brags to Her Mother That Her Starting Salary as a Management