You are now twenty-three years old and have just finished university.

You have two job offers. The first offer (Job A) is with a municipal government (i.e., low risk). Your salary will start at $40,000 per year and will grow at the rate of 4% p.a. If you take this job, you will retire at age sixty-five. The second offer (Job B) is with a private company and involves a higher risk. Your salary will start at $55,000 per year and will grow at the rate of 7% p.a. If you take this job, you want to retire when you reach age sixty. Suppose that you believe that the valuation rates appropriate for the two jobs are 2% p.a., and 5.5% p.a. respectively (both are annualcompounding rates). Suppose also that your salary is paid at the end of the year. Strictly on financial terms, which job will you choose?