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Consumer price index number goes up from 110 to 200 and the Salary of a worker is also raised from Rs. 325 to Rs. Therfore , in real terms, to maintain his previous standard of living he should get an additional amount of:
- a)Rs . 85
- b)Rs. 90.91
- c)Rs. 98.25
- d)None of these.
Correct answer is option 'B'. Can you explain this answer?
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Consumer price index number goes up from 110 to 200 and the Salary of ...
Solution:
Given,
Initial Consumer price index (CPI) = 110
New Consumer price index (CPI) = 200
Initial Salary = Rs. 325
New Salary = Rs. ?
To maintain the previous standard of living, the worker should get an additional amount.
Let us find the new salary using the formula of CPI,
CPI = (Cost of the basket in the particular year / Cost of the basket in the base year) x 100
Therefore, the cost of the basket in the base year = (CPI x Cost of the basket in the base year) / 100
Initial cost of the basket = (110 x Cost of the basket in the base year) / 100
New cost of the basket = (200 x Cost of the basket in the base year) / 100
To find the new salary, we can use the proportionality rule of the cost of living index, which states that:
New salary / Initial salary = New cost of the basket / Initial cost of the basket
New Salary / 325 = (200 x Cost of the basket in the base year) / (110 x Cost of the basket in the base year)
New Salary / 325 = 200/110
New Salary = (325 x 200) / 110
New Salary = Rs. 590.91
Therefore, the worker's new salary is Rs. 590.91.
To maintain his previous standard of living, he should get an additional amount, which is calculated as follows:
Additional amount = New salary - Initial salary
Additional amount = Rs. 590.91 - Rs. 325
Additional amount = Rs. 265.91
Rounding off the answer to the nearest rupee, we get Rs. 266.
Hence, option (b) Rs. 90.91 is the correct answer.
Given,
Initial Consumer price index (CPI) = 110
New Consumer price index (CPI) = 200
Initial Salary = Rs. 325
New Salary = Rs. ?
To maintain the previous standard of living, the worker should get an additional amount.
Let us find the new salary using the formula of CPI,
CPI = (Cost of the basket in the particular year / Cost of the basket in the base year) x 100
Therefore, the cost of the basket in the base year = (CPI x Cost of the basket in the base year) / 100
Initial cost of the basket = (110 x Cost of the basket in the base year) / 100
New cost of the basket = (200 x Cost of the basket in the base year) / 100
To find the new salary, we can use the proportionality rule of the cost of living index, which states that:
New salary / Initial salary = New cost of the basket / Initial cost of the basket
New Salary / 325 = (200 x Cost of the basket in the base year) / (110 x Cost of the basket in the base year)
New Salary / 325 = 200/110
New Salary = (325 x 200) / 110
New Salary = Rs. 590.91
Therefore, the worker's new salary is Rs. 590.91.
To maintain his previous standard of living, he should get an additional amount, which is calculated as follows:
Additional amount = New salary - Initial salary
Additional amount = Rs. 590.91 - Rs. 325
Additional amount = Rs. 265.91
Rounding off the answer to the nearest rupee, we get Rs. 266.
Hence, option (b) Rs. 90.91 is the correct answer.
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Consumer price index number goes up from 110 to 200 and the Salary of a worker is also raised from Rs. 325 to Rs. Therfore , in real terms, to maintain his previous standard of living he should get an additional amount of:a)Rs . 85b)Rs. 90.91c)Rs. 98.25d)None of these.Correct answer is option 'B'. Can you explain this answer?
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Consumer price index number goes up from 110 to 200 and the Salary of a worker is also raised from Rs. 325 to Rs. Therfore , in real terms, to maintain his previous standard of living he should get an additional amount of:a)Rs . 85b)Rs. 90.91c)Rs. 98.25d)None of these.Correct answer is option 'B'. Can you explain this answer? 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 Consumer price index number goes up from 110 to 200 and the Salary of a worker is also raised from Rs. 325 to Rs. Therfore , in real terms, to maintain his previous standard of living he should get an additional amount of:a)Rs . 85b)Rs. 90.91c)Rs. 98.25d)None of these.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consumer price index number goes up from 110 to 200 and the Salary of a worker is also raised from Rs. 325 to Rs. Therfore , in real terms, to maintain his previous standard of living he should get an additional amount of:a)Rs . 85b)Rs. 90.91c)Rs. 98.25d)None of these.Correct answer is option 'B'. Can you explain this answer?.
Consumer price index number goes up from 110 to 200 and the Salary of a worker is also raised from Rs. 325 to Rs. Therfore , in real terms, to maintain his previous standard of living he should get an additional amount of:a)Rs . 85b)Rs. 90.91c)Rs. 98.25d)None of these.Correct answer is option 'B'. Can you explain this answer? 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 Consumer price index number goes up from 110 to 200 and the Salary of a worker is also raised from Rs. 325 to Rs. Therfore , in real terms, to maintain his previous standard of living he should get an additional amount of:a)Rs . 85b)Rs. 90.91c)Rs. 98.25d)None of these.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consumer price index number goes up from 110 to 200 and the Salary of a worker is also raised from Rs. 325 to Rs. Therfore , in real terms, to maintain his previous standard of living he should get an additional amount of:a)Rs . 85b)Rs. 90.91c)Rs. 98.25d)None of these.Correct answer is option 'B'. Can you explain this answer?.
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