A graduate earns $26,000 a year and is promised a 2% cost-of-living rise each year. What is the salary after one year?

1. A 2% rise means the new salary is 102% of the old one. 2. So multiply the starting salary by 1.02. 3. That gives 26,000 times 1.02 = 26,520. 4. Adding 2% of 10,000 rather than of 26,000 would give 26,200, and multiplying by 1.04 would give 27,040. _Source: OpenStax Algebra and Trigonometry (CC BY 4.0), Ch 13 "Sequences, Probability and Counting Theory", section 13.3 Geometric Sequences_