Question

Your salary has increased 50 percent in five years. What is the annual percentage increase? Round your answer to one decimal place.

a. 8.7%



b. 11.2%



c. 8.5%



d. 10%

Answer 1

correct option is c. 8.5%

Step-by-step explanation:

given data

salary increased = 50 percent

time = 5 year

solution

if present value is 1 than future value will be

Future Value FV = present value ×
`(1+r)^(t)` .............1

here r is rate and t is time

Future Value FV = 1 ×
`(1+0.50)^(5)`

Future Value FV = 1.5

so

`(1+r)^(5)` = 1.5

solve we get Rate of increase

Rate of increase r = 0.8447

and

Percentage increase will be

Percentage increase = 0.8447 ×100

Percentage increase = 8.5%

so correct option is c. 8.5%