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.