Question

If you earn $3250 per month and you expect your earnings to increase by 2.2% per year, how much do you think you will be making in 4 years?

Answer 1

Answer: $42546.9 will be the earning in 4 years.

Step-by-step explanation:

The equation for compound interest follows:

$A=P(1+\frac{r}{100})^n$

where,

A = total amount

P = Principle amount

r =  rate of interest

n = number of years

We are given:

Earnings earned per month = $3250

Earnings earned per year = ($3250 × 12) = $39000

The values become:

$P=\ 39000\\r=2.2\%\\n=4yrs$

Putting values in above equation, we get:

$A=39000(1+\frac{2.2}{100})^4\\\\A=\ 42546.9$

Hence, $42546.9 will be the earning in 4 years.