Suppose your salary in 2014 is $70,000. If the annual inflation rate is 5%, what salary do you need to make in 2022 in order for it to keep up with inflation? Round your answer to the nearest cent, if necessary.
To calculate the salary needed in 2022 to keep up with inflation, we can use the formula:
New salary = Salary in 2014 x (1 + inflation rate)^number of years
Plugging in the values:
New salary = $70,000 x (1 + 0.05)^8
New salary = $70,000 x (1.05)^8
New salary = $70,000 x 1.477455
New salary = $103,421.85
Therefore, in order for your salary to keep up with 5% inflation rate from 2014 to 2022, you would need to make $103,421.85 in 2022.