Sam Steward is a freelance Web page designer. Listed below are his yearly wages

Question

Sam Steward is a freelance Web page designer. Listed below are his yearly wages for several years between 2007 and 2013. Also included is an industry index for Web page designers that reports the rate of wage inflation in the industry. This index has a base period of 1995. Compute Sam's real income for the selected years during the six-year period. (Round your final answers to 2 decimal places.) Did his wages keep up with inflation, or did he lose ground? (Round your final answers for real wages to the nearest whole dollar and round the final percent value to 2 decimal places.)

Explanation / Answer

for to get base 2007 index ; we need to divide all index with 160.6;

hence

Sam's real wage decreases from $ 83.94 in 2007 to$ 83.03 in 2013....................

decrease in the real wage of (|83.03-83.94)|*100/83.94 =1.08% over the six years.............

year index(base 1995) index(base 2007) wage real income 2007 160.6 100.00 134.8 83.94 2009 173.6 108.09 145.2 83.64 2011 187.9 117.00 156.6 83.34 2013 203.3 126.59 168.8 83.03

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