If your starting salary were $40,000 and you received a 3% increase at the end of every year for 15 years, what will be the amount, in dollars, you will earn during your 16th year working there?

The salary during the 16th year will be US$ 62,318.70

Step-by-step explanation:

Starting salary = US$ 40,000

Duration of the job contract = 15 years

Salary increase rate = 3% compounded annually

2. Let's find the future value of this starting salary after 15 years, using the following formula:

FV = PV * (1 + r) ⁿ

PV = Starting salary = US$ 40,000

number of periods (n) = 15 (15 years compounded annually)

Salary increase rate (r) = 3% = 0.03

Replacing with the real values, we have:

FV = 40,000 * (1 + 0.03) ¹⁵

FV = 40,000 * (1.03) ¹⁵

FV = 40,000 * 1.558

FV = US$ 62,318.70

The salary during the 16th year will be US$ 62,318.70