You have just graduated from college with a BS in computer science or software e

Question

You have just graduated from college with a BS in computer science or software engineering. Two companies have offered you a job. 1 1. Company A offers you $50,000 plus a yearly raise of 5% of your salary. 2. Company X offers you $60,000 plus a yearly raise of $2,000.

i. Assuming that all other benefits being equal and assuming long term employment, which company’s offer would you accept?

ii. Does your salary from company A ever exceed your salary from company X? Explain your answer.

iii. How long would you need to stay at company A until your total earnings equaled your total earnings from company X?

Explanation / Answer

1)Çompany A offers geometric growth

company X offeres arthimatic growth

hence i would accept company A offer

2)

yes, it will since

this is a classic compound interest formula , higher the pricipal higher the return , and principal is increasing constantly

3)

50000 * (1+5%)ˆn = 60000 + n * 2

solving the above equation for n gives the answer

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