1. Jenny Franklin estimates that as a result of completing her master’s degree, she will earn

$ 7,000 a year more for the next 40 years.

a. What would be the total amount of additional earnings?

40 yrs * 7,000/ yr = $280,000

I don't understand how to get this part?
b. What would be the future value of these additional earnings based on an annual interest rate of 6 percent?

See Sat,1-28-12,11:55am post.

To calculate the future value of the additional earnings of $7,000 per year for 40 years with an annual interest rate of 6 percent, you can use the formula for calculating the future value of an annuity.

The formula is:

Future Value = P * ((1 + r)^n - 1) / r

Where:
P = Annual payment
r = Interest rate (in decimal form)
n = Number of years

In this case, the annual payment (P) is $7,000, the interest rate (r) is 6 percent (or 0.06 in decimal form), and the number of years (n) is 40.

Plugging these values into the formula:

Future Value = $7,000 * ((1 + 0.06)^40 - 1) / 0.06

Using a calculator or spreadsheet software, solving this equation will give you the future value of the additional earnings.