At the end of 2015, Anne Brown earned $72,500 per year as a systems analyst and
ID: 385773 • Letter: A
Question
At the end of 2015, Anne Brown earned $72,500 per year as a systems analyst and John Williams earned $39,500 per year as an administrative assistant. Each received a 5 percent pay increase every year until the year 2020.
Anne Brown ($)
John Williams ($)
2016
76,125
41,475
2017
79,931
43,549
2018
83,928
645,726
2019
88,124
48,012
2020
92,530
50,413
If Anne receives an annual merit increase of 5 percent per year, her salary will be $_______in 2020. If John receives and annual merit increase of 5 percent per year, his salary will be $______ iin 2020. Round your response to the nearest hundredths place.
Anne Brown ($)
John Williams ($)
2016
76,125
41,475
2017
79,931
43,549
2018
83,928
645,726
2019
88,124
48,012
2020
92,530
50,413
Explanation / Answer
Assuming that there is 5%annual merit increment starts from 2016 on the 2015 salary. As both both of them recieve salary increase, the total salary at the end of year 2016 is 5%+5% i. E 1.1 times the salary of 2015.
Similarly at the end of 2020 is (1.1)^5 times the salary of 2015.
= 1.61051 times the salary of 2015.
Therefore the salary of Anne is 1.61051*72,500 = $116, 762
The salary of John is 1.61051*39,500 = $63,615
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