Question

Your starting salary at a new company is $34,000 and it increase by 2.5% each year. What will you salary be in 5 years? d) Your car cost $42,500 when you purchased it in 2015. The value of the car decreases by 15% annually. How much will your car be worth in 2022?

Answer 1

Given:

a)

The salary of the company in first year = $34000

The salary is increased by 2.5% each year.

To find the salary in 5 years.

Formula

If the original salary is x and is increased by b% every year, the salary after t years is = $x(\frac{100+b}{100} )^{t}$

Now,

Putting,

$x = 34000, b = 2.5 and t= 5$ we get,

The salary after 5 years

= $34000(\frac{100+2.5}{100})^{5}$

= $(34000)(1.1314)$

= 38467.88 (approx)

Hence,

The salary after 5 years is $ 38467.88.

b)

Given:

The price of the car in 2015 = $42500

The value of the car decreased by 15% annually.

To find the price of car in 2022.

Formula:

If the original price is x and is decreased by b% every year, the price after t years is = $x(\frac{100-b}{100} )^{t}$

Now,

Putting,

$x= 42500, b = 15%, t=7$$, t= 7$ we get,

The price of the car in 2022 is:

$=425000(\frac{100-15}{100} )^{7}$

$=(42500)(0.320)$

= $13624.52$ (approx)

Hence,

The price of the car in 2022 is $ 13624.52.