QR: Percentage problem

[Electrons]

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Bill Gates recieved 10% increase in each of the last 2 yrs. His present salary is $21,780. What was his starting salary?

A: $18,000.

I just have a feel for it and guessed it correctly but not sure how it's derived mathmatically. I know this is a backward problem but not sure how to set it up.

 

[STIG]

21780 - (2178) - ((21780-2178)x.1) = whatever answer.

 

[REH]

x= 21780/(1.1)^2

 

[Electrons]

Burma, it doesn't equate to 18,000

REH got it right. Thanks.

 

[manthedent]

x= 21780/(1.1)^2

where did the 1.1 come from?

 

[will9631]

where did the 1.1 come from?

1.1 = 100% + 10% = 1 +.1

since the salary increased by 10% each year, it was multiplied by 1.1 each year