Question

Your salary has increased 50 percent in five years. What is the annual percentage increase? Round your answer to one decimal place.
a. 8.7%



b. 11.2%



c. 8.5%



d. 10%

Answer 1

Answer:

correct option is c. 8.5%

Explanation:

given data

salary increased = 50 percent

time = 5 year

solution

if present value is 1 than future value will be

Future Value  FV  = present value × $(1+r)^{t}$  .............1

here r is rate and t is time

Future Value  FV  = 1 × $(1+0.50)^{5}$

Future Value  FV  = 1.5

so

$(1+r)^{5}$ = 1.5  

solve we get Rate of increase

Rate of increase r  = 0.8447  

and

Percentage increase will be

Percentage increase = 0.8447 ×100

Percentage increase = 8.5%

so correct option is c. 8.5%