The graph represents the purchasing power if the inflation is 12%. Estimate the purchasing power of a monthly salary of $3000?
Okay I got it it is $2700 oh woah I didn't think I'd be able to solve it
Uhhh I'm trying to figure this out too
To estimate the purchasing power of a monthly salary of $3000 after an inflation rate of 12%, follow these steps:
Step 1: Calculate the inflation-adjusted salary:
Inflation rate = 12%
Inflation-adjusted salary = Original salary + (Original salary * inflation rate)
= $3000 + ($3000 * 0.12)
= $3000 + $360
= $3360
Step 2: Determine the purchasing power:
Purchasing power = Inflation-adjusted salary
= $3360
Therefore, the estimated purchasing power of a monthly salary of $3000 after a 12% inflation rate is $3360.
To estimate the purchasing power of a monthly salary of $3000 with an inflation rate of 12%, you need to calculate the purchasing power after adjusting for inflation.
Here's how you can do it:
Step 1: Calculate the rate of inflation
In this case, the rate of inflation is given as 12% (0.12).
Step 2: Calculate the inflation factor
The inflation factor represents the increase in prices due to inflation. It is calculated by adding 1 to the rate of inflation.
Inflation factor = 1 + Rate of inflation
Inflation factor = 1 + 0.12 = 1.12
Step 3: Calculate the adjusted purchasing power
To calculate the adjusted purchasing power, divide the original salary by the inflation factor.
Adjusted purchasing power = Original salary / Inflation factor
Adjusted purchasing power = $3000 / 1.12
Calculating this:
Adjusted purchasing power ≈ $2,678.57
Therefore, the estimated purchasing power of a monthly salary of $3000, considering a 12% inflation rate, is approximately $2,678.57.