Principal amount, P = $72,000
Annual raise (rate), r = 5% = 5/100 = 0.05
Number of years, n= 10
We can use the compoud interest approach to solve this problem.
[tex]\begin{gathered} \text{ A = P(1+r)}^n \\ \text{Where A = Amount after n periods} \end{gathered}[/tex]Substituting the values of P, r and n, we have
[tex]\begin{gathered} \text{ A=72,000(1+0.05)}^{10} \\ A=72,000(1.05)^{10} \\ A=72,000(1.6288946) \\ A=117,280.413 \end{gathered}[/tex]A = $117,280.41 (nearest cent)
Hence, his salary in 10 years = $117,280.41 (to nearest cent)
