Can somebody please explain why.... (1 Viewer)

[Lucas_]

Lucia currently earns $25 000. Her wage increases by 5% each year. Find:

(a) Her wage after 6 years
(b) Her total earnings in 6 years

Can somebody please explain why 'n' is 7 in this question and not '6'. And furthermore, why we use S₇ and not S₆ when we work out the total earnings?

Thanks

 

[tOnnyAyye]

Is this the actual question ?? It should give you more info than just that O_O.

 

[xamineO]

Because it starts from 0.
Therefore
6-0+1 = 7

 

[tOnnyAyye]

actually.... This is the pattern.

25000, 25000(1.05), 25000(1.05)^2, 25000(1.05)^3, 2500091.05)^4, 25000(1.05)^5, 25000(1.05)^6,......

Your first term is the current wage, which is $25000, not 25000(1.05)^2. This is because the wage increase occurs in the next year, not 'as of right now'.

Therefore there should be 7 terms.

Part B is the same principle, except you use the sum formula for G.P.