Marissa knows that she needs $35,000 for a down payment on a house. She found an investment that earns 3.25% interest compoundin
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Answer:
$7.62 per hour
Step-by-step explanation:
Since, Heather gets a raise every 3 months, in 2 years, she will get a raise 8 times (2years = 24 months, 24 divided by 3 is 8).
Now it becomes a compound growth problem. We can use the formula shown below to solve these type of problems.
Where,
- F is the future value (what we want to find)
- P is the present rate ($6.5)
- r is the rate of growth, in decimal (2% growth means 0.02)
- t is the time frame, number of times compounding occurs (for our case we have figured it to be 8)
<u>Now plugging in all the info, we get the value of F:</u>
Thus, after 2 years, Heather's hourly rate will be $7.62