A Labour Contract Provides for a First-Year Wage of $10

Multiple Choice

A labour contract provides for a first-year wage of $10 per hour,and specifies that the real wage will rise by 3% in the second year of the contract and by another 3% in the third year.The consumer price index (CPI) is 100 in the first year,107 in the second year,and 115 in the third year.What dollar wage must be paid in the third year?

A) $10.00 per hour.
B) $10.61 per hour.
C) $11.15 per hour.
D) $12.20 per hour.
E) $12.22 per hour.