James received a raise after his first year on the job to $43,800 from his initial salary of $42,000. Inflation averaged 2.8% for that first year. In real terms (i.e., adjusted for inflation), what was his real raise stated as a percentage?

Your calculation for real income is:

A= income after raise / (1.0 + previous inflation rate)

B= income after raise / (1.5 + previous inflation rate)

C= income before raise / (1.0 + previous inflation rate)

D= income before raise / (1.5 + previous inflation rate)