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Jim's current income is $12000. If his monthly income increased by 10%. Find the total income after 2 months.

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closed as off-topic by John B, Martin R, Umberto P., Watson, MCT May 18 '16 at 14:28

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    $\begingroup$ By 10% of what? His income in the previous month or $12000 ("base income")? And what problem do you have? $\endgroup$ – Abstraction May 18 '16 at 11:00
  • $\begingroup$ yes 10% of his initial income. Why downvote ? $\endgroup$ – Cody May 18 '16 at 11:12
  • $\begingroup$ I doubt it was down voted for the simplicity, rather, the fact that you haven't shown any understanding or original effort in solving or researching how to solve the problem. This is not saying that you haven't: most likely you ended up here after trying multiple methods - just tell us which you tried. In future if you write Qs like "I have tried x,y,z as demonstrated by [this] and [that] resource but I cannot understand this step here" you will get a far more welcoming voting response $\endgroup$ – Alexander McFarlane May 18 '16 at 17:21
  • $\begingroup$ @AlexanderMcFarlane Thanks for the tip $\endgroup$ – Cody May 20 '16 at 16:53
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You can do like that:

  • After one month: 12000 + 0.1x12000 = 12000 + 1200 = 13200

  • After two months: 13200 + 0.1x13200 = 13200 + 1320 = 14520

But the problem is when the number of months get big!

Then you can use $M = C(1 + i)^t$, $M$ is the final capital, $C$ is the inicial capital, $i$ is the rate and $t$ is the time (like how many months.)

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  • $\begingroup$ Why calculate 10% of 13200 again ? $\endgroup$ – Cody May 18 '16 at 11:20
  • $\begingroup$ Because you want to know his income after 2 months, not just 1. $\endgroup$ – Tesla May 18 '16 at 11:26
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$12000 \times (1.10)^2 = 14520$ is his income after 2 months..

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