Home > Algebra > Percent Equations

You made $3000 on a part-time job last year. If you expect to make the same amount this year, and the inflation rate is three percent, what is your purchasing power?

Answer 1

Kennedy Adams

New spending power is 97.087% of this year
(to 3 decimal places)

Assumption: All prices are subject to a 3% inflation rate (which is not the case in reality).

Thus, the modification is:

#$x larr" Last year's cost"#

This year's price:

#$x+$(3/100xx x) = $x(1+3/100)=$x(103/100)#

#$3000(103/100) = $3090#

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Thus the new #ul("'spending power'")# is #($3000)/($3090)# of this year

To express this as a percentage of our "spending power" from the previous year, we have:

#(cancel($)3000)/(cancel($)3090)xx100% = 97.087378...%#

To three decimal places, the new spending power is 97.087%.

By signing up, you agree to our Terms of Service and Privacy Policy

Answer 2

Nathan Axel

Your purchasing power would decrease by approximately 3 percent due to inflation. So, if you made $3000 last year, your purchasing power this year would be reduced to approximately$ 2910.

By signing up, you agree to our Terms of Service and Privacy Policy

Answer from HIX Tutor

When evaluating a one-sided limit, you need to be careful when a quantity is approaching zero since its sign is different depending on which way it is approaching zero from. Let us look at some examples.