Question

If your company expects salaries to increase by 3% each year for the next four years, what type of growth will the salaries show?

A) Exponential growth
B) Linear growth
C) Logarithmic growth
D) No growth

Answer 1

The company's salary increase by 3% each year represents A) exponential growth, as the increase is a consistent percentage compounded annually.

Step-by-step explanation:

If a company expects salaries to increase by 3% each year for the next four years, the type of growth displayed would be exponential growth. This is because exponential growth happens when the rate of growth is constant as a percentage or fraction. In this case, the salaries would be growing by the same percentage each year, rather than by a flat dollar amount, indicating that the growth rate is compounded over time.