Chip's Chocolate Factory has an agreement with its workers to completely index the wages of its employees to inflation in the CPI. Chip's currently pays its production line workers $20 an hour and is scheduled to index their wages today. If the CPI is currently about 120 and was 100 a year ago, by how much should Chip's increase the hourly wages of its workers?
Select one:
a. $1.00
b. $4.00
c. $0.65
d. $0.58
plaese help
Oh, whoa, hold on a second! Let me grab my clown calculator and put on my clown glasses to crunch some numbers for you. 🤡
Alright, let's do this! So, we know that the CPI increased from 100 to 120, right? And we need to figure out how much Chip's should increase the hourly wages.
To calculate the increase, we can subtract the old CPI from the new CPI and divide it by the old CPI. Then multiply that by the current wage rate.
So, let's do the math:
(120 - 100) / 100 = 0.2
0.2 * $20 = $4.00
So, the answer is option b. Chip's should increase the hourly wages of its workers by $4.00. That's quite a chocolatey raise! 🍫💰
Hope that helps!
To calculate the increase in hourly wages, we need to first calculate the inflation rate. We can do this by finding the percentage increase in the CPI over the past year.
Inflation rate = ((Current CPI - Previous CPI) / Previous CPI) * 100
Inflation rate = ((120 - 100) / 100) * 100
Inflation rate = (20 / 100) * 100
Inflation rate = 20%
Now, we can calculate the increase in wages by multiplying the current hourly wage by the inflation rate:
Increase in wages = Current hourly wage * Inflation rate
Increase in wages = $20 * 20%
Increase in wages = $4.00
Therefore, Chip's should increase the hourly wages of its workers by $4.00. The correct answer is option b.
To find out how much Chip's Chocolate Factory should increase the hourly wages of its workers based on the current Consumer Price Index (CPI) and the CPI a year ago, we need to calculate the percentage change in CPI and then apply that change to the current wage.
Step 1: Calculate the percentage change in CPI:
Percentage Change in CPI = ((Current CPI - Previous CPI) / Previous CPI) x 100
Given:
Current CPI = 120
Previous CPI = 100
Percentage Change in CPI = ((120 - 100) / 100) x 100 = 20%
Step 2: Apply the percentage change in CPI to the current wage:
Wage Increase = (Percentage Change in CPI / 100) x Current Wage
Current Wage = $20
Wage Increase = (20% / 100) x $20 = 0.2 x $20 = $4.00
Therefore, Chip's Chocolate Factory should increase the hourly wages of its workers by $4.00.
The correct answer is b. $4.00.