ARE 201 Lab 2

70 of the average cost of living in the united states

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Unformatted text preview: arolina is 97.70 % of the average cost-of-living in the United States.&quot; In other words, the average 8 cost of living in live in South Carolina is slightly more than the average cost of living in North Carolina. Now, take a look at the cost of living in Connecticut, New York, and New Jersey. Assume you live there and you are getting ready to retire. Where would you move to make your retirement income spend farther? Would North Carolina or South Carolina make your retirement dollars go farther? Now do you understand why so many folks from up north move from “up their” to “down here”? Simple economics! Well, maybe the weather helps too. ii) Let's assume that your income is \$22,000 in South Carolina. What level of income in North Carolina would give you the same level of purchasing power as in South Carolina? An income of \$22,000 in South Carolina is equivalent to an income of \$21,819.86 in North Carolina. How did we figure that out? We would have to have a North Carolina Income of \$22,000 x (96.90 / 97.70) = \$21,819.86 South Carolina income N.C. Cost-ofLiving Index S.C. Cost-ofLiving Index to have the same purchasing power that a \$22,000 income in South Carolina would provide. In general, The Level of Income Needed in State X to Obtain the Same Level of Purchasing Power as in State Y = (Income in State Y) x Cost of Living Index for State X Cost of Living Index for State Y Or another way to look at it is to think in terms of moving from...
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This lab report was uploaded on 02/19/2014 for the course ARE 201 taught by Professor Eryuruk during the Spring '08 term at N.C. State.

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