Shane is thinking about apprenticing as a plumber and notes that master plumbers in his region of the country make about $55,000 a year starting out. However, salaries are expected to increase by about 10 percent over the next four years. How much can Shane expect to make when his apprenticeship is over in four years? (in dollars)
So the answer will be $220,000 or is that incorrect.
HUH? Increase by four times? I'd love to go to work there!
Do a sanity check.
55000 * 1.10^4 = 80,525.50
if it increases by 10% you multiply by 1.10 each year.
The answer is incorrect. To calculate how much Shane can expect to make when his apprenticeship is over in four years, we need to account for the salary increase of 10 percent each year.
Starting salary: $55,000
After 1 year: $55,000 + ($55,000 * 0.10) = $60,500
After 2 years: $60,500 + ($60,500 * 0.10) = $66,550
After 3 years: $66,550 + ($66,550 * 0.10) = $73,205
After 4 years: $73,205 + ($73,205 * 0.10) = $80,526.50
Therefore, Shane can expect to make approximately $80,526.50 when his apprenticeship is over in four years.
To calculate how much Shane can expect to make when his apprenticeship is over in four years, we need to consider the yearly salary increase of 10 percent.
Starting salary: $55,000
Salary increase per year: 10% of $55,000 = $5,500
To find the salary after 4 years, we can use the formula for compound interest:
Future value = Present value × (1 + interest rate)^n
Where:
- Future value is the salary after 4 years,
- Present value is the starting salary ($55,000),
- Interest rate is the annual increase rate (10% or 0.10),
- n is the number of years (4).
Calculating the future value:
Future value = $55,000 × (1 + 0.10)^4
= $55,000 × (1.10)^4
= $55,000 × 1.4641
≈ $80,525.50
Therefore, Shane can expect to make approximately $80,525.50 when his apprenticeship is over in four years.