Question

A job pays a salary of 29,000 the first year. During the next 6 years, the salary increases by 5% each year. What is the salary for the 7th year? What is the total salary over the 7-year period? (Round to the nearest cent.)

Answer 1

Salary for the 7th year = 38,862 (Approx)

Total salary over the 7-year period = 236,060

Explanation:

Given:

First year salary = 29,000

Growth rate in salary = 5 % = 0.05

Find:

Salary for the 7th year = ?

Total salary over the 7-year period = ?

Computation:

Salary for the 7th year :

`Salary\ for\ the\ 7th\ year = 29,000(1+0.05)^6\\\\Salary\ for\ the\ 7th\ year = 38,862.77`

Salary for the 7th year = 38,862 (Approx)

Total salary over the 7-year period :

`Total\ salary\ over\ the\ 7-year\ period = 29,000( 1 + 1.05 + 1.05^2 + 1.05^3+1.05^4+1.05^5+1.05^6)\\\\Total\ salary\ over\ the\ 7-year\ period = 29,000( 1 + 1.05 + 1.1025 + 1.1576+1.2155+1.2762+1.34)\\\\Total\ salary\ over\ the\ 7-year\ period = 29,000(8.14)\\\\Total\ salary\ over\ the\ 7-year\ period =236,060`

Total salary over the 7-year period = 236,060