Answer to Question #280563 in Financial Math for Rogy

Question

An investment firm has a job opening with a salary of N45,000 for the first year. Suppose that during the next 39 years, there is a 5% raise each year. Find the total compensation over the 40-year period. 

Answer 1

$s_n=\frac{a(r^n-1)}{r-1}\\ =\frac{4500(1.05^{40}-1)}{1.05-1}\\=5435989.84$