Question

Question

An employee is starting a job with an annual(yearly) salary of $40,000.

The employee's salary will increase by 3% at the end of each year with the company.

What will the employee's salary, in dollars, be at the end of the second year with the company?

Answer 1

To calculate the employee's salary at the end of the second year, we first need to calculate the salary increase for the first year:

Salary increase for the first year = $40,000 * 3% = $40,000 * 0.03 = $1,200

So, the employee's salary at the end of the first year will be $40,000 + $1,200 = $41,200.

Now, we need to calculate the salary increase for the second year based on the new salary of $41,200:

Salary increase for the second year = $41,200 * 3% = $41,200 * 0.03 = $1,236

Therefore, the employee's salary at the end of the second year with the company will be $41,200 + $1,236 = $42,436.