Help with word problem??

Question

Paul has taken a job with a starting salary of $18,000 with annual raises of 5%. What will his salary be during his fifth year on the job?

Answer 1

Multiply that year's salary x .05 (or 5%). Then you have the raise increase for that year, which you add to that year's starting salary. For example: 18000x.05=900 ;
900+18000=18900 (which is the starting salary for the second year). Then, 18900 x .05=945 ; 945+18900=20837.25 and so on.

year 1= 18000
year 2= 18900
year 3= 19845
year 4= 20837.25
year 5= 21879.11

Answer 2

Previous answer is right, EXCEPT Paul's year 1 salary is 18,000, so the formula should be ^(n-1)
You get 21,879.113

(Year one = 18,000)
(Year two = 18,900)
(Year three = $19,845)
(Year four = $20,837.25)
(Year five = 21,879.11)

(Heh, guess the first guy got the answer right now...)

Answer 3

18,000(1+.05)^4
= $21,879.11

In year 1 = $18000
In year 2 = $18000(1.05) = $18900
In year 3 = $18000(1.05^2) = $19845
In year 4 = $18000(1.05^3) = $20837.25
In year 5 = $18000(1.05^4) = $21879.11

Answer 4

This is a compound interest problem

Amount = 18000(1+i)^n
Amount = 18000(1+0.05)^4
Amount = 18000*1.2155062
Amount = $21,879.11

In the 5th year, he has had 4 raises.
.