1. What is the Salary Growth Formula?

The salary growth formula calculates how your salary will increase over time based on a consistent annual raise percentage. This is useful for financial planning and career growth projections.

2. How Does the Calculator Work?

The calculator uses the compound growth formula:

Where:

• Old Salary — Current salary amount
• Rate — Annual percentage increase
• Periods — Number of years for projection

Explanation: The formula accounts for compound growth, where each year's increase is applied to the previous year's salary.

3. Importance of Salary Projection

Details: Understanding potential salary growth helps with career planning, loan applications, retirement planning, and setting realistic financial goals.

4. Using the Calculator

Tips: Enter your current salary, expected annual raise percentage, and number of years you want to project. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this calculation realistic for actual salary growth?
A: It assumes consistent percentage raises, which may not match real-world variations in raises, promotions, or job changes.

Q2: How does this compare to simple interest calculations?
A: This uses compound growth (each raise builds on the previous salary) rather than simple interest (raises calculated only on original salary).

Q3: Should I include bonuses in this calculation?
A: This calculator is for base salary only. For total compensation projections, you'd need to account for bonuses separately.

Q4: What's a typical annual raise percentage?
A: Typical raises range 2-5% for cost-of-living adjustments, with higher percentages for promotions or exceptional performance.

Q5: How can I account for inflation?
A: For "real" salary growth, subtract expected inflation rate from your annual raise percentage.