Answer:
loss = - 672.3 ....
explanation
According to the given statement John was notified of a 3.3% raise in a year. It shows the income increases.
Raise in a year = 3.3% =0.033
Raise = old income * 0.033 = 63,800*0.033 =$ 2105.4
New income = $63,800 + $ 2105.4 = $65905.4
Now the statements states that CPI index increased by 4.4%
Then,
the price index of previous year = 100
and the price index of this year = 100+4.4 = 104.4
100/104.4 = x/65905.4
By cross multiplication:
x = 65905.4 × 100 / 104.4
x=63127.7
Therefore the change in his purchasing power is $63127.7 - $63,800
= - 672.3
The answer contains negative sign which shows loss in purchasing power
Hence loss = - 672.3 ....
