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Suppose that your income is $33,900 per year and you receive a cost-of-living raise each year. If inflation is constant at 9.5% annually, in how many years will you bemaking $44,300 per year? Round your answer to the nearest whole number.

User Mlodhi
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1 Answer

4 votes

We can interpret this as a compounded interest. Remember that its formula is:


T=P(1+r)^n

Where:

• T, is the total amount after the investment. In this case, after the raise

,

• P, is the principal. In this case, the intial salary

,

• r, is the interest rate. In this case, the raise percentage

,

• n, is the times the interest is compounded. In this case, the times the raise is compounded.

Using this and the data given, we'll have the following equations:


44300=33900(1+(9.5)/(100))^n

Solving for n,


undefined

User Guilleva
by
8.2k points
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