Question

An investment firm has a job opening with a salary of $41,000 for the first year. During the next 29 years, there is a 4% raise each year. Find the total compensation over the 30-year period.

Answer 1

12,474.61

Step-by-step explanation:

This can be solve as a compound interest. The first year the employer has a salary of 4000. For second year (s)he will have an increase of 4% so 4000x0,04= 160, and the salary so will be 4000+160=4160. Next year the salary will have another increase of 4% which will equal 4160x(1 + 0.04) = 4326.4. We could continue but as you can see there is a patron which simplifies to salary*(1 + growth rate)^number of period.

4000*(1.04)^29=12,474.61