SOLUTION: if my salary has to double every 7 years to keep up with inflation. What will is the yearly inflation rate if salaries increase yearly? Can I have a formula please
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Question 1093741: if my salary has to double every 7 years to keep up with inflation. What will is the yearly inflation rate if salaries increase yearly? Can I have a formula please Answer by jorel1380(3719) (Show Source):
You can put this solution on YOUR website! Let n be your salary now. Then, in 7 years, your salary needs to double; to become 2n. So:
2n=n(1+roi)^7, where roi=rate of inflation, in by year. So:
2n=n(1+roi)^7
2=(1+roi)^7
ln 2=ln (1+roi)^7=7 ln (1+roi)
1n 2/7=ln (1+roi)
0.09902102579427790134531887449403=ln (1+roi)
e^0.09902102579427790134531887449403=e^ln (1+roi)=1+roi
1.1040895136738123376495053876233=1+roi
roi=0.1040895 or about 10.41%
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