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Exercise

Forecast salary growth and cost of living

Due to both inflation and increased productivity from experience, you can expect your salary to grow at different rates depending on your job. Now, since you are working in a growing and in-demand career field as a Data Scientist, you can assume a steady growth in your annual salary every year based on performance.

You can assume an annual salary growth rate of 5%, which means if you start at $85,000 per year, you can expect to earn over $176,000 per year after 15 years. After taxes, assuming your tax rate hasn't changed, that works out to roughly $125,000 per year, which is not unreasonable for a Data Scientist. In fact, you might even make it to that level in a few years! But just to be safe, you should be conservative with your projections.

For this application, assume all inflation and salary growth happens in smaller increments on a monthly basis instead of just one large increase at the end of each year.

monthly_takehome_salary from the previous exercise is available.

Instructions
100 XP
  • Derive the equivalent monthly salary growth (see the hint for the formula!)
  • Derive your actual salary forecast over time using the cumulative_salary_growth_forecast we defined for you.
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