Question

Need help with number 12 it relates to number 11

swrio 24.7 Mia Denton was an accountant in 1943 and eamed 52 Was an accountant in 1943 and earned $21.000 that year. Her son is an accountant too and he eamed this year. Suppose the price index was 18.3 in 1943 and 20.2 in the current year. 11. Refer to Scenario 24-1. Mia's 1943 income in current year dollars is a. $39,900. b. $379,800. Currat year c. $23.180. d. $298,033. Farming X CPIT Converting prica 12. Refer to Scenario 24-1. In real terms, Mia's income amounts to about what percentage of her son's income? a. 12.9 percent b. 1164.8 percent c. 8.6 percent d. 1.1 percent real rate= nominal late -inflation rate

Answer 1

Son's income (1943) = 270000 x 18.3/20.2 = $ 244604 ( = Son's present income x price index (1943)/ price index (present))

Mia's income as a percentage of son's income = 21000/244604 x 100 = 8.6%