220k views
4 votes
Find the final hourly wage if a $10.50 starting wage is increased by 6% each year for 7 years.

2 Answers

4 votes

Final answer:

The final hourly wage after a 6% increase each year for 7 years from a starting wage of $10.50 is calculated using compounded increase. Converting the percentage to a decimal and using the compound interest formula, the final wage is approximately $15.76.

Step-by-step explanation:

To find the final hourly wage after a 6% increase each year for 7 years from a starting wage of $10.50, we can use the formula for compound interest, which is similar to calculating compounded percentage increase. The formula is Final Wage = Starting Wage * (1 + rate)^years, where the rate is the annual increase rate as a decimal and years is the number of years the wage increases.

First, we convert the 6% increase to a decimal by dividing by 100, which gives us 0.06. Then we apply the formula: Final Wage = $10.50 * (1 + 0.06)^7.

By calculating this, we'll find that the final wage after 7 years is approximately:

Final Wage = $10.50 * (1.06)^7
Final Wage = $10.50 * 1.5007
Final Wage ≈ $15.76

Therefore, the final hourly wage after 7 years would be approximately $15.76.

User Mohammad Ghanem
by
8.2k points
7 votes

Answer:

In seven years the hourly rate will be $15.79.

Step-by-step explanation:

Giving the following information:

Hourly rate= $10.5

Number of periods= 7 years

Increase rate (i)= 6%

To calculate the hourly rate in 7 years, we need to use the following formula:

FV= PV*(1 + i)^n

FV= 10.5*(1.06^7)

FV= $15.79

In seven years the hourly rate will be $15.79.

User Brain Foo Long
by
8.1k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories