Answer :
Given:
• Salary in 2012 = $60,000
,• Annual inflation rate = 3% ==> 0.03
Let's find the salary in 2020 i order to keep up with the inflation.
Apply the exponential growth formula:
[tex]y=a(1+r)^x[/tex]Where:
a is the initial amount = 60000
r is the growth rate = 3% ==> 0.03
x is the number if years after 2012
Number of years from 2020 - 2012 = 8 years.
Thus, to find the salary in 2020, substitute 8 for x, 60000 for a, and 0.03 for r:
[tex]\begin{gathered} y=60000(1+0.03)^8 \\ \\ y=60000(1.03)^8 \\ \\ y=60000(1.26677) \\ \\ y=76006.20 \end{gathered}[/tex]Therefore, the salary will be $75