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

Answer:

94 years

Step-by-step 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

$(1.0125)^t=\frac{120000}{40000} \\\\(1.0125)^t=3\\\ t Log(1.0125)= log(3)\\\ t*0.005= 0.47$

dividing both sides by 0.005 we have

$t= 0.47/0.005\\t= 94$