Paul just graduated from college and landed his first “real” job, which pays $33,000 a year. In 10 years, what will he need to earn to maintain the same purchasing power if inflation averages 3%?

To determine how much Paul will need to earn in 10 years to maintain the same purchasing power, we can use the formula for future value with inflation:

\[
\text{Future Salary} = \text{Current Salary} \times (1 + \text{Inflation Rate})^{\text{Number of Years}}
\]

Where:
- Current Salary = $33,000
- Inflation Rate = 3% or 0.03
- Number of Years = 10

Plugging in the values:

\[
\text{Future Salary} = 33,000 \times (1 + 0.03)^{10}
\]

Let me calculate that for you.Paul will need to earn approximately **$44,349.24** in 10 years to maintain the same purchasing power if inflation averages 3% annually.

Would you like further details or have any questions?

Here are some related questions to consider:
1. How would a higher inflation rate (e.g., 5%) affect Paul's future salary needs?
2. What if Paul receives a yearly raise of 2% in addition to inflation?
3. How does the formula change for different time periods (e.g., 5 or 15 years)?
4. How does inflation impact the cost of goods and services over time?
5. What is the difference between nominal and real salary adjustments?

**Tip:** Regularly adjusting your salary expectations based on inflation helps maintain your standard of living over time.

Paul just graduated from college and landed his first 'real' job, which pays $33,000 a year. In 10 years, what will he need to earn to maintain the same purchasing power if inflation averages 3%?

Learn how to calculate future salary to maintain purchasing power. If Paul currently earns $33,000, he will need to earn approximately $44,349.24 in 10 years with 3% average inflation. This solution explains key algebraic concepts and the exponential growth formula used to adjust salaries for inflation. Suitable for Grades 10-12.

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