Solve the problem.
-Carla takes a job with a starting salary of $40,000 for the first year with an annual increase of 4% beginning in the second year. What is Carla's salary, to the nearest dollar, in the sixth year?
A)$48,666
B)$49,428
C)$47,308
D)$51,072

Question

Quizplus · Accepted Answer

Carla's salary increases by 4% annually starting in the second year. To find her salary in the sixth year, we use the formula for compound interest: $A = P(1 + r)^n$, where $A$ is the amount after $n$ years, $P$ is the principal amount (initial salary), $r$ is the annual rate of increase, and $n$ is the number of years the salary has been increasing. Here, $P = $40,000$, $r = 0.04$ (4%), and $n = 5$ (since the salary increases start in the second year). Plugging these values in, we get $A = 40000(1 + 0.04)^5 = 40000(1.04)^5 ≈ $48,666$, rounding to the nearest dollar.

Solve the Problem. -Carla Takes a Job with a Starting Salary of $40,000