Question

If your starting salary is $40,000 and you  receive a 4.2% raise every year, how much  TOTAL money will you make in 15 years?

Answer 1

the first year, the amount is 40,000

the second year is 40000 + 4.2% of 40000, or 0.042 * 4000, so 40000+(0.042*4000)
common factoring that we get 40000(1 + 0.042), or just 40000(1.042)

in short, the starting amount is 40000, and to get the next term's value you'd use the "common ratio" of 1.042, namely the multiplier of 1.042.

for the third year it'll be 40000(1.042) + (0.042 *40000(1.042) ), again, common factoring that

40000(1.042)(1 + 0.042) or 40000(1.042)(1.042) or 40000(1.042)²

therefore,


`\bf \qquad \qquad \textit{sum of a finite geometric sequence}\\\\ S_n=\sum\limits_(i=1)^(n)\ a_1\cdot r^(i-1)\implies S_n=a_1\left( \cfrac{1-r^n}{1-r} \right)\quad \begin{cases} n=n^(th)\ term\\ a_1=\textit{first term's value}\\ r=\textit{common ratio}\\ ----------\\ a_1=40000\\ r=1.042\\ n=15 \end{cases} \\\\\\ S_(15)=40000\left( \cfrac{1-1.042^(15)}{1-1.042} \right)\implies S_(15)\approx 40000\left( \cfrac{-0.8536}{-0.042} \right) \\\\\\ S_(15)\approx 812951.42`