Question

You accept a job that pays a salary of $40,000 the first year. During the next 39 years, you will receive a 4% raise each year. What would be your total compensation over the 40-year period?

Answer 1

$40,000(1 + 1.04 + 1.04² + .... + 1.04³⁹)

= $40,000((1.04³⁹ - 1)/.04)

= $3,616,366