Monthly salary of on employee was Rs.10,000 in the year 2000 and it was increase to Rs.20,000 in the year 2013 while the consumer price index number is 240 in year 2013 with the base year 2000, what should be his salary in comparison of consumer price index in the year 2013?

Question

Answer

Comparing Salary with Consumer Price Index (CPI)

Given information:
- Monthly salary in year 2000 = Rs. 10,000
- Monthly salary in year 2013 = Rs. 20,000
- CPI number in year 2013 with base year 2000 = 240

To compare the salary with CPI, we need to adjust the salary for inflation.

Calculating Inflation Rate
- CPI in year 2000 = 100 (base year)
- CPI in year 2013 = 240
- Inflation rate = ((CPI in year 2013 - CPI in year 2000) / CPI in year 2000) x 100
= ((240-100)/100) x 100
= 140%

Adjusting Salary for Inflation
To adjust the salary for inflation, we need to multiply the salary with inflation rate.
- Adjusted salary in year 2013 = Monthly salary in year 2000 x (1 + inflation rate)
= Rs. 10,000 x (1 + 1.4)
= Rs. 24,000

Comparing Adjusted Salary with CPI
- Adjusted salary in year 2013 = Rs. 24,000
- CPI in year 2013 with base year 2000 = 240
- Salary in comparison to CPI = Adjusted salary in year 2013 / CPI in year 2013 with base year 2000
= Rs. 24,000 / 240
= Rs. 100

Conclusion
- The salary in comparison to CPI in year 2013 is Rs. 100.
- The salary increased from Rs. 10,000 in year 2000 to Rs. 20,000 in year 2013, but the inflation rate during this period was 140%, which means the purchasing power of the salary decreased.
- To compare the salary with CPI, we adjusted the salary for inflation and arrived at an adjusted salary of Rs. 24,000.
- The salary in comparison to CPI is calculated by dividing the adjusted salary by CPI in year 2013 with base year 2000, which is Rs. 100. This means the purchasing power of the salary remained the same as in year 2000.

Answer

10000/100 *140 = 14000(extra) 14000+10000 =24000

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