You have taken a new job with a start-up company. You agreed to a modest salary
ID: 2727147 • Letter: Y
Question
You have taken a new job with a start-up company. You agreed to a modest salary for the first two years, but if the company is successful you will be paid a $32,000 bonus at the end of your second year of employment. When you receive it, you plan to invest it for 5 more years and conservatively believe you can earn no less than 4.5 percent per year. Based on this assumption, how much money will you have 7 years from now?
$39,877.82
$41,687.14
$44,079.84
$47,908.12
$52,002.67
$39,877.82
$41,687.14
$44,079.84
$47,908.12
$52,002.67
Explanation / Answer
Future value = Present value ( 1+R)^N
= 32000(1+0.045)^5 i.e 39877.82
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