Question

21) Loretta is a Special Education teacher in Atlanta and in 2010 she made $40,000 per year working for the Cobb County School System. She has gotten several performance raises over the years. Now in 2017 she has an offer to work for a specialized private school and they are offering her a salary of $70,000 per year. The Price Index representing her buying power in 2010 was 100 and in 2017 it is 141. She thinks it is a good deal since it is more money but she wants to know if in 7 years as a Special Ed teacher, if her purchasing power gained ground over the last 7 years. What is the approximate value of her buying power now expressed in 2010 dollars? A) $40,000 B) $49,645 $21,898 D) $70,000 C)

Answer 1

CPI in 2010 = 100

CPI in 2017 = 141

Buying power in 2010 dollars = 70000*100/141 = 49645

Option(B)