Question

Today you earn a salary of $28,500. What will be your annual salary fifteen years from now if you earn annual raised of 3.5 percent? Round to the nearest cent. Do not include any unit (If your answer is $111.11, then type 111.11 without $ sign.)

Answer 1

Answer:

$FV= 28500 (1+ \frac{0.035}{1})^{1*15}= 47747.441$

And rounded to the nearest cent we got $FV= 47747.44$

Explanation:

For this case we can use the future value formula given by:

$FV = P(1 +\frac{i}{n})^{nt}$

Where FV represent the future value

PV represent the present value $ 28500

i represent the interest rate of the annual raised in fraction i = 0.035

n =1 since represent the number of times that the interest is compounded in 1 year, and since the rate is yearly then n=1

t represent the number of years and for this case t=15

If we replace the values given we have:

$FV= 28500 (1+ \frac{0.035}{1})^{1*15}= 47747.441$

And rounded to the nearest cent we got $FV= 47747.44$