Question

Arlo is offered a job in des moines, where the cpi is 80, and a job in new york, where the cpi is 125. arlo's job offer in des moines is for $42,000. how much does the new york job have to pay in order for the two salaries to represent the same purchasing power

Answer 1

Given that Arlo is offered a job in des moines, where the cpi is 80, and a job in new york, where the cpi is 125. arlo's job offer in des moines is for $42,000.

Let the amount the new york job will pay be x, then

$\frac{x}{125} = \frac{42,000}{80} =525 \\ \\ \Rightarrow x=125\times525=\ 65,625$

Therefore, the new york job have to pay him $65,625 in order for the two salaries to represent the same purchasing power.