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You have just joined the investment banking firm of Davidson and Smith. They have offered you two different salary arrangements. You can have $ 7

You have just joined the investment banking firm of Davidson and Smith. They have offered you two different salary arrangements. You can have $

75, 000

per year for the next three years, or you can have

64, 000

per year for the next three years along with a $

30, 000

signing bonus today. The bonus is paid immediately. If the interest rate is

10 %

compounded monthly, which do you prefer?

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