Given: Base Year CPI = 100, Year 1 CPI = 106, Year 2 CPI = 119, Year 3 CPI = 132.

Given: Base Year CPI = 100, Year 1 CPI = 106, Year 2 CPI = 119, Year 3 CPI = 132.

• Year 1 vs Base: $$\text{Inflation Rate}_{\text{Y1}} = \frac{106 - 100}{100} \times 100\% = \frac{6}{100} \times 100\% = 6\%$$
• Year 2 vs Base: $$\text{Inflation Rate}_{\text{Y2}} = \frac{119 - 100}{100} \times 100\% = \frac{19}{100} \times 100\% = 19\%$$
• Year 3 vs Base: $$\text{Inflation Rate}_{\text{Y3}} = \frac{132 - 100}{100} \times 100\% = \frac{32}{100} \times 100\% = 32\%$$

Given: Nominal salary = K18,000 per year.

• Year 1: $$\text{Real Income}_{\text{Y1}} = \frac{\text{K}18,000}{106} \times 100 \approx \text{K}16,981.13$$
• Year 2: $$\text{Real Income}_{\text{Y2}} = \frac{\text{K}18,000}{119} \times 100 \approx \text{K}15,126.05$$
• Year 3: $$\text{Real Income}_{\text{Y3}} = \frac{\text{K}18,000}{132} \times 100 \approx \text{K}13,636.36$$

The real incomes are K16,981.13 (Year 1), K15,126.05 (Year 2), and K13,636.36 (Year 3).

The lowest real income is K13,636.36, which occurred in Year 3.
Justification: Real income represents the actual purchasing power of the nominal salary. Since the real income is lowest in Year 3, the worker's purchasing power was at its lowest, meaning they were worst off in that year.