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Suppose a business executive are earning rs 2050 in base year what should be his salary in current year if his standard of living is to remain same?
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Suppose a business executive are earning rs 2050 in base year what sho...
Calculating Salary Increase for Business Executive
To calculate the salary increase for the business executive, we need to use the concept of inflation. Inflation refers to the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. So, if the executive wants to maintain their standard of living, their salary should be increased to keep up with the rising prices of goods and services.
Calculating the Inflation Rate
The first step is to calculate the inflation rate. We can use the Consumer Price Index (CPI) to calculate the inflation rate. CPI measures the average change in prices of a basket of goods and services consumed by households. We can use the following formula to calculate the inflation rate:
Inflation rate = (CPI in current year - CPI in base year) / CPI in base year x 100%
Calculating the Salary Increase
Once we have calculated the inflation rate, we can use it to calculate the salary increase. We can use the following formula to calculate the new salary:
New salary = (1 + inflation rate) x Base salary
Example Calculation
Let's assume that the CPI in the base year is 100, and in the current year, it is 120. Therefore, the inflation rate is:
Inflation rate = (120 - 100) / 100 x 100% = 20%
Now, to calculate the new salary, we can use the following formula:
New salary = (1 + 0.20) x 2050 = Rs. 2460
Conclusion
In conclusion, to maintain the standard of living of a business executive, their salary should be increased with the rate of inflation. The inflation rate can be calculated using the CPI, and the new salary can be calculated using the formula mentioned above. In this example, the executive's new salary should be Rs. 2460 to maintain their standard of living.
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Suppose a business executive are earning rs 2050 in base year what sho...
Incomplete question... Whtlat is the index of current year
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Suppose a business executive are earning rs 2050 in base year what should be his salary in current year if his standard of living is to remain same?
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Suppose a business executive are earning rs 2050 in base year what should be his salary in current year if his standard of living is to remain same? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Suppose a business executive are earning rs 2050 in base year what should be his salary in current year if his standard of living is to remain same? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppose a business executive are earning rs 2050 in base year what should be his salary in current year if his standard of living is to remain same?.
Suppose a business executive are earning rs 2050 in base year what should be his salary in current year if his standard of living is to remain same? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Suppose a business executive are earning rs 2050 in base year what should be his salary in current year if his standard of living is to remain same? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppose a business executive are earning rs 2050 in base year what should be his salary in current year if his standard of living is to remain same?.
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