Question

Find the final hourly wage if a $14.00 starting wage is increased by 5.5% each year for 10 years. The final hourly wage is $____Round your answer to the nearest cent.

Answer 1

Answer: $23.91

The exponential growth formula goes by:

`y=a(1+r)^x`

Where:

a = present value

r = rate

x = time

From the given, we know that:

a = $14.00

r = 5.5% = 0.055

x = 10

Substitute these to the equation:

`\begin{gathered} y=a(1+r)^x \\ y=14.00(1+0.055)^(10) \\ y=23.9140 \\ y=23.91 \end{gathered}`