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Heather makes $6.50 per hour. Every three months, she is eligible for a 2% raise. How much will she make after 2 years if she gets a raise every time she is eligible?

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TaeKwonDoIsDead

Answer:

$7.62 per hour


Step-by-step explanation:

Since, Heather gets a raise every 3 months, in 2 years, she will get a raise 8 times (2years = 24 months, 24 divided by 3 is 8).

Now it becomes a compound growth problem. We can use the formula shown below to solve these type of problems.

[tex]F=P(1+r)^t[/tex]

Where,

  • F is the future value (what we want to find)
  • P is the present rate ($6.5)
  • r is the rate of growth, in decimal (2% growth means 0.02)
  • t is the time frame, number of times compounding occurs (for our case we have figured it to be 8)

Now plugging in all the info, we get the value of F:

[tex]F=P(1+r)^t\\F=6.5(1+0.02)^8\\F=6.5(1.02)^8\\F=7.62[/tex]


Thus, after 2 years, Heather's hourly rate will be $7.62

Heather gets $6.76 after 2 years

What is compound interest?

Compound interest is the cumulative sum of the principal and the accumulated interest

Initial earnings = $6.50

Number of months in two years = 24

Heather gets a 2% raise every 3 months

Number of times Heather gets a 2% raise = 24/3

Number of times Heather gets a 2% raise = 8

Rate = 2% = 0.02

The amount she gets after 2 years will be:

[tex]A(2)=6.5(1+\frac{0.02}{4})^{8}\\\\ A(2)= \$6.76[/tex]

Heather gets $6.76 after 2 years

Learn more on compound interest here: https://brainly.com/question/24924853

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