Suppose your salary in 2014 is $70,000. If the annual inflation rate is 5%, what salary do you need to make in 2022 in order for it to keep up with inflation? Round your answer to the nearest cent, if necessary.

Answer 1

To calculate the salary needed in 2022 to keep up with inflation, we can use the formula:
New salary = Salary in 2014 x (1 + inflation rate)^number of years

Plugging in the values:
New salary = $70,000 x (1 + 0.05)^8
New salary = $70,000 x (1.05)^8
New salary = $70,000 x 1.477455

New salary = $103,421.85

Therefore, in order for your salary to keep up with 5% inflation rate from 2014 to 2022, you would need to make $103,421.85 in 2022.