What is the present value of the offer for pamela

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Problem 1: Pamela has received a job offer from a large investment bank as an assistant to the vice president. Her base salary will be $60,000 today. Assuming for simplicity that she will receive her first annual salary payment with the appropriate increment one year from the day she begins to work. In addition, she will get an immediate $20,000 bonus for joining the company today. Her salary will grow at 3 percent each year. Each year she will receive a bonus equal to 5 percent of her salary. Pamela is expected to work for the next 40 years. What is the present value of the offer, if the discount rate is 8 percent?

a. $20,000.00
b. $61,800.00
c. $1,122,929.30
d. $1,602,929.95
e. $2,395,101.72

Reference no: EM132835806

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