You are considering two salary offers. The first one will pay you $80,000 a year for...

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You are considering two salary offers. The first one will pay you $80,000 a year for...

You are considering two salary offers. The first one will pay you $80,000 a year for two years. The second one will pay you $60,000 a year for two years and an $35,000 additional bonus, paid today.

The salaries would be paid in a lump sum at the end of each year. If the interest rate is 5%, compounded monthly, which is the better offer?

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Answer 1

Answer #1

Given Interest rate 0.05 0.00416667 p.m. Monyhly compounding effective rate is 0.05116232 5% Time Option 1 pv factor PV Optio

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Answer 2

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