Calculating Purchasing Power Using CPI
Last year, the Consumer Price Index (CPI) was 120, and a household earned $80,000. If the CPI for the current year is 130, what must the household earn this year to maintain the same purchasing power?
A
$78,000
B
$80,000
C
$61,538
D
Approximately $51,000
E
Approximately $87,000
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