Final answer:
To find Jack's salary after 7 years with a 4% increase per year, use compound interest formula $45,000(1 + 0.04)^7 to get approximately $59,260.50.
Step-by-step explanation:
To calculate Jack's salary in 7 years with a guaranteed 4% annual increase, we use the formula for compound interest growth, which applies to salary increases as well. The formula is P(1 + r)^n, where P is the principal amount (initial salary), r is the rate of increase, and n is the number of periods (years).
Jack's starting salary is $45,000, the rate of increase is 4% (which is 0.04 as a decimal), and the number of years is 7.
Therefore, Jack's salary in 7 years will be:
$45,000(1 + 0.04)^7 = $45,000(1.04)^7 = $45,000 * 1.3169 = $59,260.50 (rounded to two decimal places).
So, Jack can expect a salary of approximately $59,260.50 after 7 years.