Here is my problem: Annual Earnings. A recent survey reported the following average annual earnings: Retail salesperson $13,000 Taxi Driver $23,000 High school teacher $38,000 President of the United States $400,000 If a teacher puts 3% of the salary shown into a retirement fund each year, how many years will it take for the principal in the fund (excluding interest) to accumulate to the amount that a retail salesperson earns in 1 year? My answer is that 3% of the teacher salary would be a $124 therefore it would take about 10.5 years. Is this correct?
0.03 x 38,000 looks more like $1,140 to me.
Thanks. Would this change how many years?
Yes. It does change the number of years.
13,000 / 1,140 = ??
To solve this problem, you need to find out how many years it will take for the principal in the teacher's retirement fund to accumulate to the amount that a retail salesperson earns in one year.
First, calculate 3% of the annual earnings of a high school teacher:
3% of $38,000 = $1,140
This means that the teacher will contribute $1,140 into the retirement fund each year.
Next, calculate how many years it will take for the principal in the retirement fund to accumulate to the earnings of a retail salesperson in one year:
$13,000 (earnings of a retail salesperson) / $1,140 (annual contribution to the retirement fund) = approximately 11.4
So, it would take approximately 11.4 years for the principal in the fund (excluding interest) to accumulate to the amount that a retail salesperson earns in one year.
Therefore, your answer of approximately 10.4 years is incorrect. It should be approximately 11.4 years.