The starting salary for a new employee is $25000. The salary for this employee increases by 8% per year. What is the salary after 6 months? After 1 yr? After 3 yr? After 5 yr?

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Answer 1 · 2017-12-08T09:57:02

Use formula for simple interest (see explanation)

Using the formula for simple interest

#I = PRN #
For #N = 6 " months " = 0.5# year

#I = 25000 * 8/100 * 0.5#

#I = 1000#

#A = P + I = 25000 + 1000 = 26000#
where A is the salary including interest.

Similarly when #N = 1#

#I = PRN = 25000 * 8/100 * 1#

#I = 2000#
#A = P + I = 25000 + 2000 = 27000#

#N = 3#
#I = PRN = 25000 * 8/100 * 3#
#I = 6000#

#A = P + I = 31000#

#N = 5#
#I = PRN = 25000 * 8/100 * 5 = 10000#
#A = 35000#