Question

You can model that you expect a 1.25% raise each year that you work for a certain company. If you currently make $40,000, how many years should go by until you are making $120,000? (Round to the closest year.)

Answer 1

94 years

Explanation:

We can approach the solution using the compound interest equation

`A= P(1+r)^t`

Given data

P= $40,000

A= $120,000

r= 1.25%= 1.25/100= 0.0125

substituting and solving for t we have

`120000= 40000(1+0.0125)^t \\\120000= 40000(1.0125)^t`

dividing both sides by 40,000 we have

`(1.0125)^t=(120000)/(40000) \\\\(1.0125)^t=3\\\ t Log(1.0125)= log(3)\\\ t*0.005= 0.47`

dividing both sides by 0.005 we have

`t= 0.47/0.005\\t= 94`