Question

Darnell and Bonnie are in their sixties and are ready to retire. Their children are grown and are supporting themselves, and Darnell and Bonnie have saved for many years in order to be able to enjoy their retirement. They currently live in San Francisco, and based on their recent spending, they estimate that they will need $50,000 annually for expenses. Darnell and Bonnie are interested in downsizing and are considering a move to either Boston or Cleveland Compare the two choices assuming the city indices are Boston: San Francisco: 135 Cleveland: 151 Consider the following scenarios and answer the questions that follow. Do not round intermediate calculations. Round your answers to the nearest dollar. Boston Cleveland Darnell and Bonnie love to vacation in Cleveland They have friends who have retired there, and the last time they visited, they found a neighborhood that they really liked. Their friends have encouraged them to move to Cleveland because the cost of living is lower Darnell and Bonnie's oldest daughter and their grandchildren live in Boston. They like the area but are concerned about the cost of living What amount will Darnell and Bonnie need on an All things being equal, $50,000 will buy how much in goods and services in Cleveland? annual basis to maintain their lifestyle in Boston?

Answer 1

what amount Darnell needs on an annual basis to maintain their lifestyle in Boston	(current income*City index in Boston)/base of 100	(50000*151)/100	75500
All thing being equal 50000 will buy how much in goods and services in Cleverland	(current income*base of 100)/City index in Boston	(50000*100)/99	50505.05051