In 1966, the minimum wage was $1.25 an hour and in 2015, it was $8.75. Algebraically determine the rate of growth to the nearest percent.

Answer 1

Hi there!

Here is a step-by-step solution :)

We need to find r and we have:

1. A(t) = 8.75
2. a = 1.25
3. t = 2015 - 1966 = 49

A(t) = a(1+r)^t

8.75 = 1.25(1+r)⁴⁹

8.75/1.25 = (1+r)⁴⁹

7 = (1+r)⁴⁹

(7)^1/49 = (1+r)^49/49

1.0405 = 1+r

0.0405 = r

So, r = 4%

Let me know if you have any questions!