In 2000, an executive earned $100,000. In 2009, the executive earned $125,000. The CPI in 2000 was 172.2, and the CPI in 2009 was 214.537. Using the CPI base, 1982-1984 = 100, what was the increase in real income from 2000 to 2009?
A) $193
B) $139
C) $580
D) $173

Question

Quizplus · Accepted Answer

The real income increase is calculated by adjusting for inflation using the CPI. The real income in 2000 dollars for 2009 is $125,000 * (172.2 / 214.537) = $100,193. The increase in real income is $100,193 - $100,000 = $193.

In 2000, an Executive Earned $100,000