An employee is starting a job with an annual salary of $65,000. The employee’s annual salary will increase by 3% at the end of each year with the company. What will the employee’s annual salary, in dollars, be at the end of the second year with the company?

Answer 1

The employee's salary will increase by 3% at the end of the first year, so the salary at the end of the first year will be:

$65,000 + ($65,000 * 0.03) = $65,000 + $1,950 = $66,950

The employee's salary will increase by 3% at the end of the second year, so the salary at the end of the second year will be:

$66,950 + ($66,950 * 0.03) = $66,950 + $2,008.50 = $68,958.50

Therefore, the employee's annual salary will be $68,958.50 at the end of the second year with the company.