Question

Madison was offered a job that paid $73,000 in its first year. The salary was set to increase by 1% per year every year. If Madison worked at the job for 21 years, what was the total amount of money earned over the 21 years, to the nearest whole number?

Answer 1

To calculate the total amount of money earned over 21 years with a starting salary of $73,000 that increases by 1% each year, you can use the formula for the sum of a geometric series:

Total earnings = Initial salary × (1 + Growth rate)^Number of years

In this case, the initial salary is $73,000, the growth rate is 1% (or 0.01), and the number of years is 21. Plugging these values into the formula:

Total earnings = $73,000 × (1 + 0.01)^21

Calculating this:

Total earnings ≈ $73,000 × 1.219009773

Total earnings ≈ $88,986.68

Rounded to the nearest whole number, Madison's total earnings over 21 years would be $88,987.