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Future Pay Formula:
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The Yearly Pay Raise Calculator estimates your future salary based on current pay, annual raise percentage, and number of years. It uses compound growth calculation to project your earnings over time.
The calculator uses the compound growth formula:
Where:
Explanation: The formula accounts for compound growth, meaning each year's raise is applied to the previous year's increased salary, not just the original base pay.
Details: Understanding future earning potential helps with financial planning, career decisions, retirement planning, and setting realistic financial goals.
Tips: Enter current annual pay in dollars, expected annual raise percentage, and number of years for projection. All values must be positive numbers.
Q1: What is the difference between simple and compound raises?
A: Simple raises apply the percentage only to the original salary each year, while compound raises apply the percentage to the previous year's increased salary, resulting in higher growth.
Q2: What is a typical annual raise percentage?
A: Typical annual raises range from 2-5% for cost-of-living adjustments, with performance-based raises potentially being higher at 5-10% or more.
Q3: Does this account for inflation?
A: No, this calculator shows nominal future pay. For real (inflation-adjusted) pay, you would need to subtract expected inflation from the raise percentage.
Q4: Can I use this for monthly or hourly pay?
A: Yes, but convert to annual equivalent first. Multiply monthly pay by 12 or hourly rate by annual work hours (typically 2080 for full-time).
Q5: What if my raise percentage changes each year?
A: This calculator assumes a constant raise percentage. For variable raises, you would need to calculate each year separately.