Question
A company has 25,000 workers. The number of workers increases at a rate of 6% per year for 3 years. Calculate the total number of workers at the end of the 3 years.
Worked Solution
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A 6% increase each year means multiplying by 1.06 each year (the multiplier for a 6% increase).
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After 1 year: 25 000 × 1.06 = 26 500 workers.
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After 2 years: 26 500 × 1.06 = 28 090 workers.
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After 3 years: 28 090 × 1.06 = 29 775.4 ≈ 29 775 workers (round to a whole number).
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Equivalently, use the compact formula: 25 000 × 1.06³ = 25 000 × 1.191016 = 29 775.4 ≈ 29 775.
29 775
Calculating simple interest instead of compound interest — adding 6% of 25 000 (= 1500) three times gives 29 500, which is wrong. Compound interest is applied to the running total each year.
Assessment Objectives (question level, Edexcel 1MA1 spec — not per step)