Another QR problem I am stuck in

[vDDmaniaC]

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You are offered a job with salary at $30000 the first year. Each succeeding year, you are guaranteed a 5% cost of living increase and up to a $2000 possible merit increase. What is the max amount you could earn during the third year at this job?

1. 37000
2. 37175
3. 37400
4. 39600
5. 40500

Ok. so what I understood on this question is each year his salary increases by 5%. so 1st year 1500 2nd year 31500*0.05 and third year (31500*1.05)*0.05=33750. What is $2000 year anyway...He gets $2000 each months ? or it means his salary won't increase beyond $2000?
Please gimme some help!

 

[boxdesker]

"Each succeeding year, you are guaranteed a 5% cost of living increase and up to a $2000 possible merit increase"

The MAX amount you can earn each year after the second year is [1.05*(salary the year before)+$2000] each year for two years. You will get the $2000 'bonus' each of the two years after your first year.

I'm sure if you redid the calculation taking this into account you would get the right answer. Unfortunately I do not have the energy to do so myself.

 

[vDDmaniaC]

Thanks, boxdesker.
I got it.
1st year 30000
2nd year 31500+2000
3rd year (33500*1.05)+2000=37175 which is 2.

THanks

 

[doc3232]

You are offered a job with salary at $30000 the first year. Each succeeding year, you are guaranteed a 5% cost of living increase and up to a $2000 possible merit increase. What is the max amount you could earn during the third year at this job?

1. 37000
2. 37175
3. 37400
4. 39600
5. 40500

Ok. so what I understood on this question is each year his salary increases by 5%. so 1st year 1500 2nd year 31500*0.05 and third year (31500*1.05)*0.05=33750. What is $2000 year anyway...He gets $2000 each months ? or it means his salary won't increase beyond $2000?
Please gimme some help!

I won't fail you this time 😉
2nd year: (5% of 30,000) + 30,000 + 2000= 1500 + 30k + 2k=33.5
(the third year): (5% of 33,500) + 33.5k + 2k= 1,675 + 33.5k + 2k=37,175
There is your answer: # 2: $37175
The question is asking basically add 5% each year and also add 2k on the side.
The first year is already set and you can't increase, the second year you increase 5% of what you made last year and also another 2k bonus, merit is bonus btw.
Then your third year you increase another 5% of what you made last year and also another 2k on the side.

 

[doc3232]

Thanks, boxdesker.
I got it.
1st year 30000
2nd year 31500+2000
3rd year (33500*1.05)+2000=37175 which is 2.

THanks

Great, I wasted time double checking and now I am too late 🙁

 

[vDDmaniaC]

Thanks, doc3232 for double checking for me

 

[topdent1]

Damn that wording is tricky. I did the computation for all three years instead of the last 2.