Question

During a job interview, Pam Thompson is offered a salary of $41,000. The company gives annual raises of 3 percent. What would be Pam’s salary during her fifth year on the job?

Answer 1

$46,145.86

Explanation:

At the end of Pam's fourth year, she will have received 4 raises. Each raise multiplies her salary by 1+3% = 1.03.

5th-year salary

Pam's salary going into her 5th year will be the product of her original salary and 4 multipliers of 1.03.

$41,000 × 1.03^4 ≈ $46,145.86

Pam's salary during her 5th year will be $46,145.86.