Real Wage Calculator

✖Nominal Wage refers to the actual amount or numerical value of a person's wages or salary without adjusting for inflation during a year.ⓘ Nominal Wage [NW]			+10% -10%
✖Consumer Price Index is a measure that examines the average change in prices of goods and services consumed by households over time.ⓘ Consumer Price Index [CPI]			+10% -10%

✖Real wage refers to the purchasing power of a person's income after accounting for inflation in a year.ⓘ Real Wage [RW]

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Formula

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Real Wage

Formula

`"RW" = "NW"/"CPI"`

Example

`"2450.98"="2500000"/"1020"`

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Real Wage Solution

STEP 0: Pre-Calculation Summary

Formula Used

Real Wage = Nominal Wage/Consumer Price Index
RW = NW/CPI
This formula uses 3 Variables

Variables Used

Real Wage - Real wage refers to the purchasing power of a person's income after accounting for inflation in a year.
Nominal Wage - Nominal Wage refers to the actual amount or numerical value of a person's wages or salary without adjusting for inflation during a year.
Consumer Price Index - Consumer Price Index is a measure that examines the average change in prices of goods and services consumed by households over time.

STEP 1: Convert Input(s) to Base Unit

Nominal Wage: 2500000 --> No Conversion Required
Consumer Price Index: 1020 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

RW = NW/CPI --> 2500000/1020

Evaluating ... ...

RW = 2450.98039215686

STEP 3: Convert Result to Output's Unit

2450.98039215686 --> No Conversion Required

FINAL ANSWER

2450.98039215686 ≈ 2450.98 <-- Real Wage

(Calculation completed in 00.004 seconds)

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Credits

Created by Aashna

IGNOU (IGNOU), India

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Verified by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

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< 18 Macroeconomics Calculators

Operating Surplus

Go Operating Surplus = Value of Output-Intermediate Consumption-Compensation of Employees-Mixed Income-Consumption of Fixed Capital-Net Indirect Taxes

Components of Aggregate Demand

Go Components of Aggregate Demand = Private Consumption Expenditure+Investment Expenditure+Government Expenditure+Net Exports

Real Effective Exchange Rate

Go Real Effective Exchange Rate = (Consumer Price Index of Domestic Nation*Nominal Effective Exchange Rate)/Consumer Price Index of Foreign Country

Net Factor Income from Abroad

Go Net Factor Income from Abroad = Net Compensation of Employees+Net Income from Property and Entrepreneurship+Net Retained Earnings

National Disposable Income

Go National Disposable Income = National Income+Net Indirect Taxes+Net Current Transfers from the Rest of the World

Gross Domestic Product at Factor Cost

Go Gross Domestic Product at Factor Cost = Gross Domestic Product at Market Price+Subsidies-Indirect Taxes

Change in Money Supply

Go Change in Money Supply = (1/Required Reserve Ratio)*Change in Bank Reserves-(Initial Deposit Amount)

Personal Disposable Income

Go Personal Disposable Income = Personal Income-Personal Taxes-Miscellaneous Receipts of Government

Life Expectancy

Go Life Expectancy = Current Age of the Individual+Average Life Expectancy-Adjustment Factor

Private Final Consumption Expenditure

Go Private Final Consumption Expenditure = Household Final Consumption Expenditure+Non Profit Private Institutions FCE

Gross National Product at Market Price

Go Gross National Product at Market Price = Gross Domestic Product at Factor Cost+Net Factor Income from Abroad

Net Domestic Product at Factor Cost

Go Net Domestic Product at Factor Cost = Net Domestic Product at Market Price-Net Indirect Taxes

Net Domestic Product at Market Price

Go Net Domestic Product at Market Price = Gross Domestic Product at Market Price-Depreciation

Growth Rate of Money Supply

Go Growth Rate of Money Supply = Rate of Inflation+Growth Rate of Real Gross Domestic Product

Real Gross Domestic Product Per Capita

Go Real Gross Domestic Product Per Capita = Real Gross Domestic Product/Total Population

Expenditure Multiplier

Go Expenditure Multiplier = Initial Consumer Price Index/Change in Government Spending

Real Wage

Go Real Wage = Nominal Wage/Consumer Price Index

Simple Deposit Multiplier

Go Simple Deposit Multiplier = 1/Required Reserve Ratio

Real Wage Formula

Real Wage = Nominal Wage/Consumer Price Index
RW = NW/CPI

What do you mean by Real Wage ?

Real Wage refers to the wage that is adjusted for inflation or equivalently, wage in terms of the amount of goods and services that can be bought. This term is used in contrast to nominal wage or unadjusted wage.
Because it has been adjusted to account for changes in the prices of goods and services, real wage provide a clearer representation of an individual's wage in terms of what they can afford to buy with those wage – specifically, in terms of the amount of goods and services that can be bought. However, real wage suffer the disadvantage of not being well defined, since the amount of inflation (which can be calculated based on different combinations of goods and services) is itself not well defined. Hence real wage defined as the total amount of goods and services that can be bought with a wage, is also not defined. This is because of changes in the relative prices.

How to Calculate Real Wage?

Real Wage calculator uses Real Wage = Nominal Wage/Consumer Price Index to calculate the Real Wage, Real Wage is defined as the actual value of wages in terms of goods and services that can be bought during a year. Real Wage is denoted by RW symbol.

How to calculate Real Wage using this online calculator? To use this online calculator for Real Wage, enter Nominal Wage (NW) & Consumer Price Index (CPI) and hit the calculate button. Here is how the Real Wage calculation can be explained with given input values -> 2450.98 = 2500000/1020.

FAQ

What is Real Wage?

Real Wage is defined as the actual value of wages in terms of goods and services that can be bought during a year and is represented as RW = NW/CPI or Real Wage = Nominal Wage/Consumer Price Index. Nominal Wage refers to the actual amount or numerical value of a person's wages or salary without adjusting for inflation during a year & Consumer Price Index is a measure that examines the average change in prices of goods and services consumed by households over time.

How to calculate Real Wage?

Real Wage is defined as the actual value of wages in terms of goods and services that can be bought during a year is calculated using Real Wage = Nominal Wage/Consumer Price Index. To calculate Real Wage, you need Nominal Wage (NW) & Consumer Price Index (CPI). With our tool, you need to enter the respective value for Nominal Wage & Consumer Price Index and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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