Problema Solution
If original salary is $42,000 and it was to increase at a rate of 5.5% per year what would your salary be during your 19th year?
Answer provided by our tutors
we know the present value
PV = $42,000
r = 5.5% per year
n = 18 years
we need to find the future value FV after 18 years (during the 19th year)
FV = PV (1 + r)^n
FV = 42000(1 + 0.055)^18
FV = $110,101.58
After 18 years, during the 19th year the salary will be $110,101.58.