Question
Billy Eyelash thinks she got everything she wanted in a recent job offer. For the first year her salary would be $91,000 received as weekly
Billy Eyelash thinks she got everything she wanted in a recent job offer. For the first year her salary would be $91,000 received as weekly payments with her first salary payment one week from the day she begins work. Her salary will increase at a rate of 6% each year for 4 years and then at a rate of 0.5% each quarter (13 weeks) after that (that is, the first quarterly increase will occur 5 years and one week from the day she begins work). If Billy expects to work for 20 years, what is the present value of the offer if the appropriate discount rate is 5.5% APR with continuous compounding? Assume each year consists of 52 weeks.
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