Given two salary options, which option should you accept?
#1: Paid $64,000 for first year and your salary is increases 3.70% yearly.
#2: Paid a starting bonus of $24,000 today. First-year salary will be $60,000 and it will increase 3.8% every year.
Market Interest Rate is 8.20% and job time is 10 years.
1)
2)
PV of second option is $487,310.97 ($24,000+$463,310.97)
Hence, i should choose option 1 i.e. $64,000 in the first year. It has highest present value.
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