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Youve just joined the investment banking firm of Dewey, Cheatum, and Howe. Theyve offered you two different salary arrangements. You can have $7,100 per month
Youve just joined the investment banking firm of Dewey, Cheatum, and Howe. Theyve offered you two different salary arrangements. You can have $7,100 per month for the next three years, or you can have $5,800 per month for the next three years, along with a $31,500 signing bonus today. Assume the interest rate is 5 percent compounded monthly. |
a. | If you take the first option, $7,100 per month for three years, what is the present value? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
b. | What is the present value of the second option? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
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