I got a salary increase of 6% each year for 8 years.What is the total percentage increase in my salary over the 8-year period? Round your answer to two decimal places if necessary.
A) 47.01%
B) 60.23%
C) 59.38%
D) 48%

Question

I got a salary increase of 6% each year for 8 years.What is the total percentage increase in my salary over the 8-year period? Round your answer to two decimal places if necessary. ​
A) 47.01%
B) 60.23%
C) 59.38%
D) 48%

Quizplus · Accepted Answer

The total percentage increase over the 8-year period can be calculated using the formula for compound interest, as the salary increase compounds annually. The formula is $A = P(1 + r)^n$, where $A$ is the final amount, $P$ is the principal amount (initial salary), $r$ is the annual rate of increase, and $n$ is the number of years. Here, $r = 0.06$ and $n = 8$. We are interested in the percentage increase, so we calculate $(1 + 0.06)^8 - 1$, which gives approximately 0.5938 or 59.38% when converted to a percentage.

I Got a Salary Increase of 6% Each Year for 8