Question

During a job interview, Pam Thompson is offered a salary of $50,000. The company gives annual raises of 12 percent. What will be

Pam's salary during her fifth year on the job? Use Exhibit 1-A. (Round time value factor to 3 decimal places and final answer to the
nearest whole number.)

Answer 1

$78 700

Explanation:

Four time periods year 2 3 4 and 5

50 000 ( 1.12 )^4 = 50 000 ( 1.574) = 78700

( 1.574 is from the table for 12 % and 4 periods )