Which of the following salaries will have a purchasing power of $24,035 if the inflation rate is five percent?
A-$25,815
B-$27,523
C-$26,000
D-$25,300
The graph represents the purchasing power if the inflation is 12%. Estimate the purchasing power of a monthly salary of $3000?
100% 5% = 95% = 0.95.
0.95x = 24,035,
X = $25300.
To determine which salary will have a purchasing power of $24,035 after a five percent inflation rate, we need to calculate the inflation-adjusted value of each salary.
Step 1: Calculate the inflation-adjusted value for each option.
A: $25,815 x (1 + 0.05) = $25,815 x 1.05 = $27,105.75
B: $27,523 x (1 + 0.05) = $27,523 x 1.05 = $28,899.15
C: $26,000 x (1 + 0.05) = $26,000 x 1.05 = $27,300
D: $25,300 x (1 + 0.05) = $25,300 x 1.05 = $26,565
Step 2: Compare the calculated values with $24,035.
From the calculations, we can see that none of the options have an inflation-adjusted value of $24,035. The closest value is option D with an inflation-adjusted value of $26,565.
Therefore, none of the given options have a purchasing power of $24,035 when the inflation rate is five percent.
To determine which salary will have a purchasing power of $24,035 considering a 5% inflation rate, we need to calculate the inflation-adjusted amount for each salary option provided. Here's how you can do it:
1. Calculate the inflation amount by multiplying the salary with the inflation rate.
Inflation amount = Salary x Inflation rate
2. Subtract the inflation amount from the original salary to find the inflation-adjusted amount.
Inflation-adjusted amount = Salary - Inflation amount
Let's calculate the adjusted amounts for each salary option:
A - $25,815:
Inflation amount = $25,815 x 0.05 = $1,290.75
Inflation-adjusted amount = $25,815 - $1,290.75 = $24,524.25
B - $27,523:
Inflation amount = $27,523 x 0.05 = $1,376.15
Inflation-adjusted amount = $27,523 - $1,376.15 = $26,146.85
C - $26,000:
Inflation amount = $26,000 x 0.05 = $1,300
Inflation-adjusted amount = $26,000 - $1,300 = $24,700
D - $25,300:
Inflation amount = $25,300 x 0.05 = $1,265
Inflation-adjusted amount = $25,300 - $1,265 = $24,035
From the calculations, we can see that option D, with a salary of $25,300, will have a purchasing power of $24,035 after considering a 5% inflation rate.