Question

If your starting salary is $40,000 and you receive a 3% increase at the end of every year, what is the total amount, in dollars, you will earn over the first 16 years that you work?

Answer 1

you can see this as.... you go to the bank, deposit your salary and they give you annually 3% in interest

how much will it be in 16 years?


`\bf \qquad \qquad \textit{Future Value of an ordinary annuity} \\\\ A=pymnt\left[ \cfrac{\left( 1+(r)/(n) \right)^(nt)-1}{(r)/(n)} \right] \\\\`


`\bf \begin{cases} A= \begin{array}{llll} \textit{original amount}\\ \textit{already compounded} \end{array} \begin{array}{llll} \end{array}\\ pymnt=\textit{periodic payments}\to &40,000\\ r=rate\to 3\%\to (3)/(100)\to &0.03\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{annually, thus once} \end{array}\to &1\\ t=years\to &16 \end{cases} \\\\\\ A=40000\left[ \cfrac{\left( 1+(0.03)/(1) \right)^(1\cdot 16)-1}{(0.03)/(1)} \right]`

Answer 2

The correct answer is $806275

Explanation: