The International Disc Jockey\'s Union has a wage contract that stipulates a yearly wage increase based on the Consumer Price Index. If this year\'s wage is $25.00, the current CPI is 180, and the contract was first signed in the base year, what was the original salary the first year of the contract?
To find the original salary in the first year of the contract, we need to calculate the wage increase based on the Consumer Price Index (CPI) and then apply it to the current salary.
The formula to calculate the wage increase based on the CPI is:
[Wage increase percentage] = [(Current CPI - Base CPI) / Base CPI] * 100
In this case, the base year's CPI is not given, so we'll assume it is 100.
Let's calculate the wage increase for this year:
Wage increase percentage = [(180 - 100) / 100] * 100
= [80 / 100] * 100
= 80%
Now, we can calculate the original salary by dividing the current salary by (1 + wage increase percentage):
Original salary = Current salary / (1 + Wage increase percentage)
= $25 / (1 + 80%)
= $25 / (1 + 0.8)
= $25 / 1.8
≈ $13.89
Therefore, the original salary in the first year of the contract was approximately $13.89.