The nominal salaries paid to the President of the United States and data for the

Question

The nominal salaries paid to the President of the United States and data

for the Consumer Price Index (CPI) for various years are given below. Calculate the real

presidential salaries in dollars (not cents) based on year 1920 dollars? Enter you answers

in the space provided in the table. Show your work in the space below the table.

Nominal Average Annual CPI Real

Year Presidential Salary (1982-84 = 100) Presidential Salary

1920 $75,000 20.0 $75,000

1940 $75,000 14.0 _______________

1960 $100,000 29.6 _______________

1980 $200,000 82.4 _______________

2000 $400,000 172.2 _______________

Explanation / Answer

Nominal Presidential

Salary

$581,757

$400,000

Thank You

Year

Nominal Presidential

Salary

Average Annual CPI (1982-84=100) Real Presidential Salary Calculation Real Presidential Salary 1920 75000 20 =(75000/20)*172.2 $64,5750 1940 $75000 14.0 =(75000/14)*172.2 $922,500 1960 $100,000 29.6 =(100000/29.6)*172.2

$581,757

1980 $200,000 82.4 =(200000/82.4)*172.2 $417,961 2000 $400,000 172.2 =(400000/172.2)*172.2

$400,000

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