Question

Luke earned $36,000 during the first year of his job at Putt-Putt Kingdom. After each year he received a 10% raise. Find his total earnings during the first five years on the job.

Answer 1

In order to solve this problem, you need to use a geometric series:
$S_{n} = \frac{ a_{1}(1 - r^{n}) }{1 - r}$
where:
a₁ = first term of the series = 36000
r = common rate = 10% raise, therefore 1.10
n = number of terms = 5

Therefore,
 $S_{n} = \frac{ 36000(1 - 1.10^{5}) }{1 - 1.10}$
= 219783.60 $

Luke's total earnings in five years are 219783.60 $.