Question

Ms. Smith just started a new job with a starting salary of $34,000. According to her contract, she will receive a 1.2% increase in her salary every year. How much will Ms. Smith earn in 30 years?

Answer 1

$48,629

Explanation:

The computation of the salary amount that she earned in 30 years

here we applied the future value formula

As we know that

Future value = Present value × (1 + interest rate)^time period

= $34,000 × (1 + 1.2%)^30

= $34,000 × 1.012^30

= $48,629