In: Statistics and Probability
Examine the second plan to increase the current minimum wage of $8.70 by 2.1% per year.
Write a formula to model what the federal minimum wage, W, should be t years after 2020.
What would minimum wage be in 2025? Round to the nearest cent.
In what year will minimum wage be at least double the 2020 value?
Here the increase in wages is 2.1% per year hence this is not linear.
This will follow compound amount formula
Where P is the starting value which is $8.7 here
r is the rate of increase which is 0.021 here (in decimal form)
t is the time which is years after 2020.
a)
So, the function is: where t is years after 2020.
b) For 2025 t = 5
Hence, in 2025 the minimum wages will be $9.65 (rounded to nearest cent)
c) Double implies wages = 2*8.7 = 17.4
Hence,
By calculator: t = 33.35 (approx)
Hence, in year 2020 +33.35 = 2053.35 = 2054 (rounded to next year)
Hence, in year 2054 the minimum wages will be at least double the 2020 value.
I hope this will help. Thank you.