Question

suppose your salary in 2013 is $55,000 if the annual inflation rate is 2% what is the salary do you need to make in 2022 in order for it to keep up with inflation? round your answer to the nearest cent, if necessary.

Answer 1

Compound amount formula is given by:

`A=P(1+(r)/(n))^(nt)`

Where:

P = $55000

r = 2% = 0.02

t = 2022 - 2013 = 9 years

n = 1

Therefore, Substituting the given values:

`A=55000(1+(0.02)/(1))^(1\cdot9)`

And solve:

`A=55000(1+0.02)^9=55000(1.02)^9=65730.09`

Answer: the salary do you need to make is $65730.09