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You have just been offered a job. Your base salary will be $95,000 per year and...

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Finance

You have just been offered a job. Your base salary will be$95,000 per year and the first year's annual salary will bereceived one year from the day you start working. You receive abonus immediately of $12,500. Your salary will grow 4 percent peryear and you will receive a bonus of 10 percent of your salary. Youexpect to work for 30 years. Your discount rate is 10 percent. Whatis the present value of your offer?

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4.2 Ratings (539 Votes)
Years salary Bonus Total pay Discount value Present Value 0 1 95000 12500 107500 091 97727 2 98800 9880 108680 083 89818 3 102752 10275 113027 075 84919 4 106862 10686 117548 068 80287 5 111137 11114 122250 062 75908 6 115582 11558 127140 056 71767 7 120205 12021 132226 051 67853 8 125014 12501 137515 047 64152 9 130014 13001    See Answer
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Transcribed Image Text

You have just been offered a job. Your base salary will be$95,000 per year and the first year's annual salary will bereceived one year from the day you start working. You receive abonus immediately of $12,500. Your salary will grow 4 percent peryear and you will receive a bonus of 10 percent of your salary. Youexpect to work for 30 years. Your discount rate is 10 percent. Whatis the present value of your offer?

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