Review Question. At a clothing stand in Korea, I was bargaining with a girl for a shirt. She said it was 33,000 wons . Then she told me she would cut 10% and give it to me for 30,000 wons . I corrected her. What was the actual discount? (33,000 – 30,000)/33,000 = .0909 = 9.09%.
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At a clothing stand in Korea, I was bargaining with a girl for a shirt. She said it was 33,000 wons. Then she told me she would cut 10% and give it to me for 30,000 wons. I corrected her. What was the actual discount?
(33,000 – 30,000)/33,000 = .0909 = 9.09%
Consumer Price Index
CPI of 1950 = Dollar Value in 1950
CPI of 1998 Dollar Value in 1998
24.1 = $3319
x = $22,448
Since the median household income in 1998 was $38,885, we can accurately say that families in 1998 was getting paid more than the families in 1950.
24.1 = $13,228
x = $89,467.39
The CPI in 1997 was 160.5.
In 1998 it was 163.0.
Definition: The inflation rate is defined to be the percentage increase in the CPI for a given year.
Therefore, inflation in 1997 was:
163-160.5 = 1.6%
So you’ll be getting $51,000. But $50,000 in 2006 constant dollars was:
50,000 = 195.3
x = $51,612.9
So getting a $1,000 raise is not a raise at all.
1. In 1930, Babe Ruth received the then staggering annual salary of $80,000. In 1998, Michael Jordan received the still staggering annual salary of $33 million. Compare their salaries. Who really made more?
2. Open NEA_funding.XLS. Create a column showing 2007 constant dollar value for each year. Then determine whether the funding was greater in 2007 or in 1966.
3. Open CPI.xls. Create a third column that contains the inflation rate for each year. Which 3 years had the greatest inflation rate?