Scenario 11-3
Sue Holloway was an accountant in 1944 and earned $12,000 that year. Her son, Josh Holloway, is an accountant today and he earned $210,000 in 2008. The price index was 17.6 in 1944 and 184 in 2008.
-Refer to Scenario 11-3. Sue Holloway's 1944 income in 2008 dollars is

Question

Quizplus · Accepted Answer

To find Sue Holloway's 1944 income in 2008 dollars, we need to adjust for inflation using the price index ratio.

Price index ratio = (2008 price index / 1944 price index) = 184/17.6 = 10.45454545

Sue Holloway's 1944 income in 2008 dollars = 12,000 x 10.45454545 = $125,454.55.

Therefore, the best choice is C.

Scenario 11-3 Sue Holloway Was an Accountant in 1944 and Earned $12,000