Vicky starts a new job with an hourly pay of $7.15. Suppose that her hourly pay increases by 5% each year. What will Vicky’s hourly pay be in 3 years

Vicky’s hourly pay will be $8.3 in 3 years.

Step-by-step explanation:

Suppose that her hourly pay increases by 5% each year, it means that the rate at which it is increasing is exponential. We would apply the formula for exponential growth which is expressed as

A = P(1 + r)^t

Where

A represents the hourly pay after t years.

t represents the number of years.

P represents the initial hourly pay.

r represents rate at which it is increasing.

From the information given,

P = $7.15

r = 5% = 5/100 = 0.05

t = 3 years

Therefore

A = 7.15(1 + 0.05)^3

A = 7.15(1.05)^3

A = $8.3