Answer to Question #292019 in Economics for Bea

Question

After a promotion, Gwen’s annual salary was increased by 7.85% to R450 000. Determine his previous monthly salary and the monthly increase he will be getting. [1] Original salary of R34 770.51, with an increase of R2 729.49 per month. [2] Original salary of R34 556.25, with an increase of R2 943.75 per month [3] Original salary of R34 556.25, with an increase of R1 943.25 per month. [4] Original salary of R34 770.51, with an increase of R2 228.35 per month. 

Answer 1

Previous monthly salary was 450,000/(1.0785×12) = 34,770.51.

The monthly increase is:

450,000/12 - 34,770.51 = 2,729.49.

So, the correct answer is [1] Original salary of R34 770.51, with an increase of R2 729.49 per month.