Question

After graduation, a student had two jobs offers on the table:

Job Offer # 1: Starting annual salary of $72,000 with an annual raise of $3,500 .

Job Offer # 2: Starting annual salary of $65,000 with an annual raise of $4,200.

1) What advice would you give to the student?

2) Write an equation describing each job offer.

3) What strategy would you use to determine which job offer might be best for the student?

Answer 1

1) In the long run, Job Offer # 2 is more lucrative. In 10 years both jobs would offer the same annual income of $107,000 and from there on forward job offer # 2 would be better.

In the short run, Job Offer # 1 makes more sense as the initial income would be more.

2)

Job Offer # 1: Annual income in nth year of employment: A_n = 72000 + 3500*n

Job Offer # 2: Annual income in nth year of employment : B_n = 65000 + 4200*n

3) I would first ask the student to decide if he is looking for a short time job or if he is planning a career with this offer and make a decision based on that.