You are offered two jobs. One initially pays $45,000 annually, and your salary will grow annually at 10%. The other pays $42,000 annually, but your salary will grow at 12%. After 10 years, which job pays the higher salary??
What will be an ideal response?
$45,000(1 + .1)10 = $45,000(2.594) = $116,730?(PV = -45000; N = 10; I = 10; PMT = 0, and FV = ?. FV = 116718.)??$42,000(1 + .12)10 = $42,000(3.106) = $130,452?(PV = -42000; N = 12; I = 10; PMT = 0, and FV = ?. FV = 130446.)?The job with the lower initial paying salary generates the higher salary after 10 years.?
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