A company offers you a job with an annual salary of $70 000 for the first year and a 5% raise every year after. Approximately how much money in total would you earn in 5 years of working there? $386794 $87500 $89340 $367500
Mathematics · High School · Tue Nov 03 2020
Answered on
Given the statement:
A company offers you a job with an annual salary of $70 000 for the first year and a 5% raise every year after.
Determine how much money in total would you earn after 5 years.
We can use the formula for compound interest since we are compounding the salary per year with percentage offered by the company.
Formula for Compound Interest:
A = P (1 + r/n)^(n)(t)
A= Future Value
P= Current Salary
r = rate
n = compounded annually since the raise is given each year
t = term or number of years.
Solution:
Substitute the given values to the formula.
A = $70,000( 1 + 0.05/1)^(5)(1)
A = $70,000( 1.05)^(5)
A = $70,000( 1.276281563)
A = $89,340.00
Final answer:
A = $89,340.00