uppose your salary in 2012 is $55,000. If the annual inflation rate is 2%, what salary do you need to make in 2019 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 2019 to keep up with inflation, we can use the formula:

Salary in 2019 = Salary in 2012 * (1 + Inflation Rate)^Number of years

Number of years = 2019 - 2012 = 7

Salary in 2019 = $55,000 * (1 + 0.02)^7
Salary in 2019 = $55,000 * (1.02)^7
Salary in 2019 = $55,000 * 1.146927
Salary in 2019 = $63,081.02

Therefore, you need to make a salary of $63,081.02 in 2019 to keep up with a 2% annual inflation rate.