Given that:
- The person's salary was reduced by 3%.
- The next year the person is given a 3% raise.
- The salary that was reduced was $40,000.
A percentage can be converted to a decimal number by dividing it by 100. Then:
[tex]3\text{\%}=\frac{3}{100}=0.03[/tex]
If $40,000 was decreased by 3%, the new salary would be:
[tex]\text{ \$}40,000-(0.03)(\text{\$}40,000)=\text{\$}38,800[/tex]
You know that the next year that new salary is increased by 3%. Then, you can determine that the new salary for this year is:
[tex]\text{ \$}38,800+(0.03)(\text{\$}38,800)=\text{\$}39,964[/tex]
Notice that:
[tex]\text{\$}40,000\ne\text{\$}39,964[/tex]
Hence, the answers are:
- If one's salary is $40,000 and decreased by 3% the salary would be:
[tex]\text{\$}38,800[/tex]
- If they were then given a 3% increase the following year they would have:
[tex]\text{\$}39,964[/tex]
- Second option.
