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Your sister earned $50,000 in 2010 and $60,000 in 2015. The Consumer Price Index was 218.1 in 2010 and 237.0 in 2015. What was her
Your sister earned $50,000 in 2010 and $60,000 in 2015. The Consumer Price Index was 218.1 in 2010 and 237.0 in 2015. What was her real (inflation-adjusted) salary in 2015 in terms of 2010 purchasing power? While her nominal salary increased 20%; by what percent did her real salary increase (i.e., real purchasing power)?
Contrast nominal (actual) and real (constant purchasing power) cash flows and derive one from the other.
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