Question

If your starting salary is $40,000 and you receive a 3% 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?

Answer 1

Answer:

The correct answer is $806275

Step-by-step explanation:

Answer 2

You can see this as.... you go to the bank, deposit your salary and they give you annually 3% in interest

how much will it be in 16 years?

$\bf \qquad \qquad \textit{Future Value of an ordinary annuity} \\\\ A=pymnt\left[ \cfrac{\left( 1+\frac{r}{n} \right)^{nt}-1}{\frac{r}{n}} \right]$

$\bf \begin{cases} A= \begin{array}{llll} \textit{original amount}\\ \textit{already compounded} \end{array} \begin{array}{llll} \end{array}\\ pymnt=\textit{periodic payments}\to &40,000\\ r=rate\to 3\%\to \frac{3}{100}\to &0.03\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{annually, thus once} \end{array}\to &1\\ t=years\to &16 \end{cases} \\\\\\ A=40000\left[ \cfrac{\left( 1+\frac{0.03}{1} \right)^{1\cdot 16}-1}{\frac{0.03}{1}} \right]$