Question

Abraham just accepted a new job at consulting firm that pays $47,500 during the first year, with an annual increase of 7% per year beginning in the second year. What can Abraham expect to earn in his fifth anniversary with the consulting firm? Round your answer to the nearest dollar

Answer 1

about $66,621

Explanation:

Since its an increase in salary, we want 0.07+1 = 1.07 (if he was losing his salary, it instead would be 0.07-1, but that's not the case here)

Then we plug it in as 47,500(1.07)^x

he's expecting what would he get in his fifth year at the firm. So let's set x = 5.

47,500(1.07)^5 = $66,621.20721 or ≈ $66,621 to the nearest dollar.

Note: This is how I'm doing it in High School. So if this is incorrect, I'm sorry.

Answer 2

64,125 I think

Explanation:

7%x 5 years =35%

35% of 47, 500 is 16625

16625 + 47,500=64,125