Upon taking his first job out of college,your Dad earned an annual salary of $38,000 and set a goal to earn $100,000 per year.If his salary increased at an average annual rate of 12%,how long did it take to reach his goal?
A)At that rate of growth,your Dad still has not earned $100,000 in a single year.
B)2.63 years
C)26.31 years
D)8.54 years

Question

Quizplus · Accepted Answer

Let's use the formula for compound interest: 
A = P(1 + r/n)^(nt) 
Where:
A = final amount (in this case, $100,000)
P = initial amount (in this case, $38,000)
r = annual interest rate as a decimal (in this case, 12% or 0.12)
n = number of times the interest is compounded per year (let's assume it's compounded annually, so n = 1)
t = time in years

Plugging in the values, we get:
$100,000 = $38,000(1 + 0.12/1)^(1t)
Simplifying:
2.63 = (1.12)^t
Taking the logarithm of both sides:
log(2.63) = t*log(1.12)
t = log(2.63)/log(1.12)
t ≈ 8.54 years

So it took your Dad 8.54 years to reach his goal. Therefore, the answer is D.

Upon Taking His First Job Out of College,your Dad Earned