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Emily got a new job that guarantees her a 6% raise every year. If she started out making $25,000, how long will it be before she doubles her current salary?

 Apr 8, 2015

Best Answer 

 #2
avatar+1693 
+13

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.
 Apr 8, 2015
 #1
avatar+2354 
+10

Let's first take a look at what happens in the first years.

Emily starts out with a salary of $25,000

After one year her salary has increased with 6%.

This means her salary is 106% of what it was last year.

Therefore her salary is now

(106100)×$25,000=1.06×$25,000=$26,500

One year later her salary again increases with 6%

The means her salary is again 106% of what it was last year

Therefore her salary is now 

(106100)×$26,500=1.06×$26,500=$28,090

 

Now suppose we had the same situation and we wanted to know what her salary was after 2 years.

Instead of first calculating her salary after one year we could also have immediately calculated

(salary after two years)=1.06×(salary after one year)=1.06×1.06×(starting salary)=(1.06)2×(starting salary)=(1.06)2×$25,000=$28,090

 

Similarly, we could show that for 3 years we have that 

(salary after three years)=1.063(starting salary)=1.063×$25,000

and that for x years we have that

(salary after x years)=1.06x=(starting salary)

 

Now, if we rewrite the exercise as an equation we need to solve

1.06x×$25,000=2×$25,000

dividing both sides by 25000 gives us

1.06x=2

 

Now, I'm not sure what your level is so I'll give you two options

option 1 (the easy option (for whole years)):

Start with 1 and keep multiplying by 1.06 until the value is bigger or equal to 2.

The number of times you multiplied is the value of x.

To illustrate, this gives

11.06=1.0611.061.06=1.062=1.123611.061.061.06=1.063=1.191016(...)1.0611=1.8982985581.0612=2.012196472

Hence after 12 years, her income has doubled.

 

Option 2 (the advanced option (for partial years)):

This option makes use of logarithms. If you've never heard of logarithms, this method is not for you.

 

We indicate the natural logarithm as ln()=elog()

We have that

1.06x=2eln(1.06x)=2ex×ln(1.06)=2x×ln(1.06)=ln(2)x=ln(2)ln(1.06)11.8957

 Hence the answer is approximately 11.8957 years

Reinout 

 Apr 8, 2015
 #2
avatar+1693 
+13
Best Answer

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civonamzuk Apr 8, 2015
 #3
avatar+118696 
0

Hi Reinout and civonamzuk,

Excellent answers from both of you - thank you  !

 Apr 9, 2015

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