Question

If you earn $3200 per month and you expect your earnings to increase by 6.4% per year, how much do you think you will be making in 6 years?

Answer 1

Answer:

You should expect to be making $55,716.14 in 6 years.

Step-by-step explanation:

Your earnings after t years is given by the following equation:

$E(t) = E(0)(1 + r)^{t}$

In which E(0) is how much you earn on the current year and r is the increase rate, as a decimal.

$3200 per month currently:

A year has 12 months. So

$E(0) = 12*3200 = 38400$

You expect your earnings to increase by 6.4% per year

So $r = 0.064$

Then

$E(t) = E(0)(1 + r)^{t}$

$E(t) = 38400(1 + 0.064)^{t}$

$E(t) = 38400(1.064)^{t}$

How much do you think you will be making in 6 years?

This is E(6).

$E(t) = 38400(1.064)^{t}$

$E(6) = 38400(1.064)^{6} = 55716.14$

You should expect to be making $55,716.14 in 6 years.