Below is Jim Walker's income for 1995 and 2007. What was Jim's real income for 2007?
A) $37,000
B) $67,000
C) $34,387
D) $38,908

Question

Below is Jim Walker's income for 1995 and 2007.  What was Jim's real income for 2007?
A) $37,000 
B) $67,000 
C) $34,387 
D) $38,908

Quizplus · Accepted Answer

The chart shows that in 1995 Jim earned $21,000. To find his real income in 2007, we need to take into account the inflation rate between the two years using the Consumer Price Index (CPI) given in the chart. The formula to adjust for inflation is: (Income in 2007) = (Income in 1995) x (CPI in 2007) / (CPI in 1995). Thus, Jim's income in 2007 would be: $21,000 x 210.4 / 152.4 = $38,908 (rounded to the nearest dollar). Therefore, the correct answer is D.

Below Is Jim Walker's Income for 1995 and 2007