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After you graduate you get a job paying $40,000 per year. Over the following three years a price index rises from 100 to 110. To maintain the purchasing power of your salary, how much must you be paid after three years? (Type your answer as a 5-digit number. Do not use a $ sign.)
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Answer #1

Solution: 44,000

Working: To maintain the purchasing power of the salary, amounto be paid after three years:

= Salary * price index current year/ price index base year

= 40,000 * 110/100

= 44,000

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