Question

As a graduating senior, Chun Kumora of Manhattan, Kansas, is eager to enter the job market at an anticipated annual salary a 41,000. Assuming an average information rate of 3% and an equal cost of living raise, what will his salary possibly come in 13 years?

Options:
A) $58,597.50
B) $54,201.86
C) $70,214.43
D) $63,032.85

Answer 1

Chun Kumora's anticipated salary after 13 years, given a 3% annual inflation rate and equal cost of living raise, will be approximately $58,475.88, with Option A) $58,597.50 being the closest answer choice.

Step-by-step explanation:

The question is about calculating the future salary of Chun Kumora after 13 years, considering an annual inflation rate of 3% and an equal cost of living raise each year. By using the formula for compound interest, which in this case applies to the salary increase, we can determine the expected salary after 13 years.

Future Salary = Current Salary × (1 + rate of increase)^number of years

Plugging in the values:

Future Salary = $41,000 × (1 + 0.03)^13

Future Salary = $41,000 × (1.03)^13

Future Salary = $41,000 × 1.42576 approximately

Future Salary = $58,475.88 approximately

The closest option to this calculated future salary is Option A) $58,597.50, which can be rounded from the actual computed value due to minor difference caused by rounding during calculations.