What is the present value of the offer

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John has received a job offer from a bank as a clerk. His base salary will be $50,000. He will receive his first annual salary payment one year from the day he begins to work. In addition, he will get an immediate $15,000 bonus for joining the company. His salary will grow at 4.2 percent each year. Each year he will receive a bonus equal to 10 percent of his salary. John is expected to work for 20 years.

What is the present value of the offer if the discount rate is 10 percent?

Reference no: EM132107935

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