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Question 6. You have just joined the investment banking firm. They have offered you two different...


Question 6.

You have just joined the investment banking firm. They have offered you two different salary arrangements. You can have $95,000 per year for the next two years, or you can have $70,000 per year for the next two years, along with a $45,000 signing bonus today. The bonus is paid immediately, and the salary is paid at the end of each year. If the interest rate is 10% compounded monthly, which do you prefer?

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