Jon begins a new job with an annual salary of $ 42,000 for his first year of employment, a guarantee of a 5% salary increase each for his second, third and fourth year and a guarantee of a 20% increase for his fifth and sixth year. What will be his salary during his sixth year of employment? Round your answer amounts to two decimal places.
(a) $ 84,015.79 (b) $ 70,013.16 (c) $ 48,620.25 (d) $ 52,093.13 (e) $ 58,344.30
How do i approach this problem to get the right answer?
I don't know if there is a formula or way to set up an equation, so I would just start a grid.
Note: If your calculator doesn't have a % function or if doing by hand, remember percent means per 100; therefore, for example, 5% = .05
year 1 = 42,000
yr 2 5% = 42,000 x 5%= amt of increase to add to the base 42,000; 42,000 + 2100 =$44,100 for year 2.
yr 3 5%. Take the salary found for yr 2,multiply by the 5% increase and add the result to the base of year 2:
44,100 + 2205 = 46,305
yr 4 5%. Follow the lead above--i.e, take your yr 3 salary and find the 5% increase to add to year 3 to get year 4.
yr 5 20% Same steps but this time 20% of year 4 and add to year 4 to get year 5.
yr 6 20%. Same steps but this time 20% of year 5 and add to year 5 to get year 6.
Choose your answer. My answer came out right to the penny without having to round and matched a choice given.
Just go step-by-step and be sure to add the amt of increase to the base for the year given. Then take that total figure to start as base for the next year to add the new increase to.
Good Luck!