Which of the following salaries will have a purchasing power of $24,035 if the inflation rate is five percent?

$25,815

$27,523

$26,000

$25,300

The purchasing power of $24,035 if the inflation rate is five percent is $25300 .

Step-by-step explanation:

Let us assume that the purchasing power of  $24,035 be y .

As given inflation rate is 5% .

(As inflation rate is inversely proportional to purchasing power .)

Assume that purchasing power be 100% .

Thus as inflation rate is increase by 5% than purchasing power decrease by 5 % .

Thus

Purchasing power = (100 - 5)%

                               = 95 %

95% is written in the decimal form .

= 0.95

Thus the equation becomes

0.95 × y = 24035

y = $25300

Therefore the purchasing power of $24,035 if the inflation rate is five percent is $25300 .

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