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You have just joined the investment banking firm of Super, Save and Growth. They have offered you the following arrangements. You can have $40,000 per

You have just joined the investment banking firm of Super, Save and Growth. They have offered you the following arrangements. You can have $40,000 per year for the next two years, or $20,000 per year for the next two years plus a $30,000 signing bonus today. If the interest rate is 8 per cent compounded quarterly, which do you prefer? Salaries are to be paid at the end of each year.

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