Question

Your starting salary at a new company is $34,000 and it increases by 2.5% each year. What will your salary be in 5 years?

Answer 1

`$38467.88`

Explanation:

Use this formula for compound interest:
)

V is the salary is 5 years
P is the when you first joined
R is the percentage increase per year
N is the number of years

Therefore,

`V= 34000xx(1+2.5%)^5`

`= 34000xx1.025^5`

= $38467.88 (2dp)