Question

imagine that you have a paycheck of $50 this week. if i tell you that i will increase your paycheck by 20% one from week from now and then 20% again two weeks from now what will be your new paychecks two weeks from now?

Answer 1

One week from now, the amount will be ...

... $50 + 0.20×$50 = $50 + 10 = $60

Two weeks from now, the amount will be ...

... $60 + 0.20×$60 = $60 + 12 = $72

_____

The first expression can be factored to be $50 × (1 + 0.20) = $50×1.2.

The second expression can be factored the same way to be $60×1.2, or ...

... ($50×1.2)×1.2 = $50×1.2²

... = $50×1.44 = $72