What is the present value of the first arrangement

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Reference no: EM131854908

You've just joined the investment banking firm of Dewey, Cheatum, and Howe. They've offered you two different salary arrangements. You can have $161,000 per year for the next two years, or you can have $60,000 per year for the next two years, along with a $35,000 signing bonus today. The bonus is paid immediately, and the salary is paid at the end of each year.

Required: (a) If the interest rate is 10 percent compounded monthly, what is the present value of the first arrangement?

(b) If the interest rate is 10 percent compounded monthly, what is the present value of the second arrangement?

Reference no: EM131854908

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