Suppose you are offered two jobs. One pays $30,000 the first year with annual raises of $2000 each year.?

Question

The second offers a starting salary of $27,000 and raises 8% each year. At the end of ten years, what would your yearly salary be from (a) first job (b) second job?

Answer 1

1) 30,000 + 10(2,000) = 50,000
2) 27,000(1.08)^10 = 58,290.97

Answer 2

Job A offers $30,000 + 2,000 annual raises
Job B ofers $27,000 + 8% increases

A) Year 1) 30,000
2) 32,000
3) 34,000
4) 36,000
5) 38,000
6) 40,000
7) 42,000
8) 44,000
9) 46,000
10) 48,000

b) Year 1) 27,000
2) 29,160
3) 31,492.80
4) 34,012.22
5) 36,733.20
6) 39,671.86
7) 42, 845.61
8) 46,273.26
9) 49,975.12
10) 53,973.13

So, by year 10, job b gives you almost $6,000 more per year.

Answer 3

Job one would pay $50,000 at the end of ten years.
Job 2 would pay about $58,290.98 at the end of ten. Job 2 would surpass job 1 at the end of year 6.
It would depend on how long you planned to stay in the job.

Answer 4

the first job=$50000 2000 x 10yrs

the second job has an estimated $ 53,765 at 27000 * 8% for
the 10 years

b is the better choice

Answer 5

Take the second job. The first one increases linearly, where the 2nd one increases exponentially.

Answer 6

If you stay with it that long, the 2nd job will end at $58,290.97, the 1st one at $50K

Answer 7

A = 50,000 a year.
B= about 51,000 a year.

Answer 8

1. $50,000.00

2. $53,973.13