Question

If your starting salary is $35,000 and you receive a 6% 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? Round your answer to the nearest whole dollar, and express your answer without using commas.

Answer 1

The starting salary is $35,000.

Salary is increased by 6% at the end of every year.

Nos of years worked = 16 years

Total salary earned in 16 years is given by An * (( 1+i )^n - 1 ) / i

Where, An = Present Salary = $35000

i = Increase in salary per year = 6% = 0.06

n = number of years = 16

= 35000 * ( 1.06 ^16 - 1 ) / .06

= 35000 * ( 2.54035 - 1 ) / .06

= 35000 * 1.54035 / .06

= 898538

Total earnings in 16 years is $ 898538