Mateo has received a job offer from a large investment bank as a clerk to an associate banker. His base salary will be $83,000. He will receive his first annual salary payment one year from the day he begins to work. In addition, he will get an immediate $10,000 bonus for joining the company. His salary will grow at 3.8% each year. Each year he will receive a bonus equal to 10% of his salary. He is expected to work for 30 years. What is the present value of the offer if the discount rate is 7.1%?

Formula for Present Value of Growing Annuity PV=C[rg1rg1(1+r1+g)t]=C[rg1(1+r1+g)t] As before, C is the payment to occur at the end of the first period; r is the discount rate; g is the rate of growth per period, expressed as a percentage; and t is the number of periods for the annuity