Question

3. Comparing salaries from different times Consider golfers who led the Professional Golfers' Association of America (PGA) in winnings at different points in time. Note that the winnings are nominal figures (unadjusted for inflation). To convert the original earnings of Palmer, Trevino, and Kite, use the formula for converting dollar figures from an earlier era into year 2017 U.S. dollars. Using those figures, fill in the following table, making sure to round your responses to the nearest U.S. dollar. Nominal Winnings (Dollars) U.S. CPI (1983 = 100) Winnings in 2017 Dollars 81,448 30.2 Year 1962 1970 1981 2017 Golfer Arnold Palmer Lee Trevino Tom Kite Justin Thomas 157,037 38.8 375,699 90.9 9,921,560 245.1 9,921,560 True or False: According to the previous table, the golfer with the highest PGA winnings in nominal dollars is not the same as the golfer with the highest PGA winnings after adjusting for inflation. O True O False

Consider golfers who led the Professional Golfers’ Association of America (PGA) in winnings at different points in time. Note that the winnings are nominal figures (unadjusted for inflation).

To convert the original earnings of Palmer, Trevino, and Kite, use the formula for converting dollar figures from an earlier era into year 2017 U.S. dollars. Using those figures, fill in the following table, making sure to round your responses to the nearest U.S. dollar.

Year	Golfer	Nominal Winnings	U.S. CPI	Winnings in 2017 Dollars
		(Dollars)	(1983 = 100)
1962	Arnold Palmer	81,448	30.2
1970	Lee Trevino	157,037	38.8
1981	Tom Kite	375,699	90.9
2017	Justin Thomas	9,921,560	245.1	9,921,560

True or False: According to the previous table, the golfer with the highest PGA winnings in nominal dollars is not the same as the golfer with the highest PGA winnings after adjusting for inflation.

True

False

Answer 1

Solution:-

Year	Golfer	Nominal Winnings	U.S CPI	Winnings in 2000 dollars
1962	Arnold Palmer	81,448	30.2	=(81,448 * 245.1 / 30.2) = 6,61,023.34
1970	Lee Trevino	157,037	38.8	=(157,037 * 245.1/ 38.8) = 9,92,004.35
1981	Tom Kite	375,699	90.9	=(375,699 * 245.1 / 90.9) = 10,13,023.38
2017	Justin Thomas	9,921,560	245.1	9,921,560

False: - The golfer with the highest PGA winnings in Nominal dollars is the same as the golfer with highest PGA winnings after adjusting for inflation I.e. Justin Thomas