Nancy had an income of $26,500 this year. If the inflation rate was 11 percent, what was her purchasing power?
purchasing power has been reduced by 11%, so
.89($26500) = $23585
To find Nancy's purchasing power, we need to adjust her income for inflation.
1. Calculate the inflation amount:
Inflation amount = Income * Inflation rate
Inflation amount = $26,500 * 0.11 = $2,915
2. Adjust the income for inflation:
Adjusted income = Income - Inflation amount
Adjusted income = $26,500 - $2,915 = $23,585
Therefore, Nancy's purchasing power after adjusting for inflation is $23,585.
To calculate Nancy's purchasing power, we need to adjust her income for inflation. Here's how you can do it:
Step 1: Calculate the inflation amount
Multiply Nancy's income by the inflation rate:
Inflation amount = $26,500 * 11% = $2,915
Step 2: Adjust Nancy's income for inflation
Subtract the inflation amount from Nancy's income to determine her adjusted income:
Adjusted income = $26,500 - $2,915 = $23,585
Step 3: Calculate the purchasing power
Nancy's purchasing power is the value of her income after adjusting for inflation. Therefore, her purchasing power is $23,585.
So, Nancy's purchasing power, taking into account an 11% inflation rate, is $23,585.