Question

Suppose that you have been hired at an annual salary of $16,000 and expect to receive annual increase of 3%. What will your salary be when you begin your sixth year?

Answer 1

well, at the beginning of the 6th year, you've been there for 5 whole years, so you've gotten 5 increases hmmm

$\qquad \textit{Amount for Exponential Growth} \\\\ A=P(1 + r)^t\qquad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{initial amount}\dotfill &16000\\ r=rate\to 3\%\to \frac{3}{100}\dotfill &0.03\\ t=years\dotfill &5\\ \end{cases} \\\\\\ A=16000(1 + 0.03)^{5}\implies A=16000(1.03)^5\implies A\approx 18548.39$