An engineer in 1950 was earning $6,000 a year. Today, in 2011, she earns $60,000 a year.

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An engineer in 1950 was earning $6,000 a year. Today, in 2011, she earns $60,000 a year. However, on average, goods today cost 8.2 times what they did in 1950.

a. What is her real income today in terms of constant 1950 dollars?

b. Calculate her salary's annual inflation rate and the cost of goods annual inflation rate.

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Related Book For  book-img-for-question

Fundamentals Of Corporate Finance

ISBN: 9781259087585

6th Canadian Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan, Gordon Roberts

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