Question

strikes, unions & collective bargaining math quiz
question 7 of 10: your employees, who now make $45/hour, are demanding raises of 4% per year for the next three years. how much would they be making after three years if you grant the raises?

a) $45 per hour
b) $47.63 per hour
c) $49.44 per hour
d) $50.62 per hour

Explanation:

Step1: Recall compound growth formula

The formula for compound growth is $A = P(1 + r)^n$, where $P$ is the principal amount (initial wage), $r$ is the annual growth rate (as a decimal), and $n$ is the number of years. Here, $P = 45$, $r = 0.04$ (since 4% = 0.04), and $n = 3$.

Step2: Substitute values into the formula

Substitute $P = 45$, $r = 0.04$, and $n = 3$ into the formula: $A = 45(1 + 0.04)^3$.

Step3: Calculate $(1 + 0.04)^3$

First, calculate $1 + 0.04 = 1.04$. Then, $1.04^3 = 1.04\times1.04\times1.04 = 1.124864$.

Step4: Calculate the final amount

Multiply $45$ by $1.124864$: $45\times1.124864 = 50.61888\approx50.62$.

Answer:

d) $50.62$ per hour