In: Finance
You have a choice between two 3-year salary packages.
If the discount rate is 6% compounded monthly, what is the value of each salary package?
Package 1 | ||||||
Month | Salary | Bonus | Total Remuneration | Discount Factor @0.5% Per Month | Present Value | |
1 | 4200.00 | 0.00 | 4200.00 | 0.995 | 4179.10 | |
2 | 4200.00 | 0.00 | 4200.00 | 0.990 | 4158.31 | |
3 | 4200.00 | 0.00 | 4200.00 | 0.985 | 4137.62 | |
4 | 4200.00 | 0.00 | 4200.00 | 0.980 | 4117.04 | |
5 | 4200.00 | 0.00 | 4200.00 | 0.975 | 4096.56 | |
6 | 4200.00 | 0.00 | 4200.00 | 0.971 | 4076.18 | |
7 | 4200.00 | 0.00 | 4200.00 | 0.966 | 4055.90 | |
8 | 4200.00 | 0.00 | 4200.00 | 0.961 | 4035.72 | |
9 | 4200.00 | 0.00 | 4200.00 | 0.956 | 4015.64 | |
10 | 4200.00 | 0.00 | 4200.00 | 0.951 | 3995.66 | |
11 | 4200.00 | 0.00 | 4200.00 | 0.947 | 3975.78 | |
12 | 4200.00 | 0.00 | 4200.00 | 0.942 | 3956.00 | |
13 | 4200.00 | 0.00 | 4200.00 | 0.937 | 3936.32 | |
14 | 4200.00 | 0.00 | 4200.00 | 0.933 | 3916.74 | |
15 | 4200.00 | 0.00 | 4200.00 | 0.928 | 3897.25 | |
16 | 4200.00 | 0.00 | 4200.00 | 0.923 | 3877.86 | |
17 | 4200.00 | 0.00 | 4200.00 | 0.919 | 3858.57 | |
18 | 4200.00 | 0.00 | 4200.00 | 0.914 | 3839.37 | |
19 | 4200.00 | 0.00 | 4200.00 | 0.910 | 3820.27 | |
20 | 4200.00 | 0.00 | 4200.00 | 0.905 | 3801.26 | |
21 | 4200.00 | 0.00 | 4200.00 | 0.901 | 3782.35 | |
22 | 4200.00 | 0.00 | 4200.00 | 0.896 | 3763.53 | |
23 | 4200.00 | 0.00 | 4200.00 | 0.892 | 3744.81 | |
24 | 4200.00 | 0.00 | 4200.00 | 0.887 | 3726.18 | |
25 | 4200.00 | 0.00 | 4200.00 | 0.883 | 3707.64 | |
26 | 4200.00 | 0.00 | 4200.00 | 0.878 | 3689.20 | |
27 | 4200.00 | 0.00 | 4200.00 | 0.874 | 3670.84 | |
28 | 4200.00 | 0.00 | 4200.00 | 0.870 | 3652.58 | |
29 | 4200.00 | 0.00 | 4200.00 | 0.865 | 3634.41 | |
30 | 4200.00 | 0.00 | 4200.00 | 0.861 | 3616.32 | |
31 | 4200.00 | 0.00 | 4200.00 | 0.857 | 3598.33 | |
32 | 4200.00 | 0.00 | 4200.00 | 0.852 | 3580.43 | |
33 | 4200.00 | 0.00 | 4200.00 | 0.848 | 3562.62 | |
34 | 4200.00 | 0.00 | 4200.00 | 0.844 | 3544.89 | |
35 | 4200.00 | 0.00 | 4200.00 | 0.840 | 3527.26 | |
36 | 4200.00 | 4000.00 | 8200.00 | 0.836 | 6852.29 | |
Value Of Package | 141400.85 | $ |
Package 2 | ||||||
Month | Salary | Bonus | Total Remuneration | Discount Factor @0.5% Per Month | Present Value | |
0 | 0.00 | 8000.00 | 8000.00 | 1.000 | 8000.00 | |
1 | 4000.00 | 0.00 | 4000.00 | 0.995 | 3980.10 | |
2 | 4000.00 | 0.00 | 4000.00 | 0.990 | 3960.30 | |
3 | 4000.00 | 0.00 | 4000.00 | 0.985 | 3940.60 | |
4 | 4000.00 | 0.00 | 4000.00 | 0.980 | 3920.99 | |
5 | 4000.00 | 0.00 | 4000.00 | 0.975 | 3901.48 | |
6 | 4000.00 | 0.00 | 4000.00 | 0.971 | 3882.07 | |
7 | 4000.00 | 0.00 | 4000.00 | 0.966 | 3862.76 | |
8 | 4000.00 | 0.00 | 4000.00 | 0.961 | 3843.54 | |
9 | 4000.00 | 0.00 | 4000.00 | 0.956 | 3824.42 | |
10 | 4000.00 | 0.00 | 4000.00 | 0.951 | 3805.39 | |
11 | 4000.00 | 0.00 | 4000.00 | 0.947 | 3786.46 | |
12 | 4000.00 | 0.00 | 4000.00 | 0.942 | 3767.62 | |
13 | 4000.00 | 0.00 | 4000.00 | 0.937 | 3748.88 | |
14 | 4000.00 | 0.00 | 4000.00 | 0.933 | 3730.23 | |
15 | 4000.00 | 0.00 | 4000.00 | 0.928 | 3711.67 | |
16 | 4000.00 | 0.00 | 4000.00 | 0.923 | 3693.20 | |
17 | 4000.00 | 0.00 | 4000.00 | 0.919 | 3674.83 | |
18 | 4000.00 | 0.00 | 4000.00 | 0.914 | 3656.54 | |
19 | 4000.00 | 0.00 | 4000.00 | 0.910 | 3638.35 | |
20 | 4000.00 | 0.00 | 4000.00 | 0.905 | 3620.25 | |
21 | 4000.00 | 0.00 | 4000.00 | 0.901 | 3602.24 | |
22 | 4000.00 | 0.00 | 4000.00 | 0.896 | 3584.32 | |
23 | 4000.00 | 0.00 | 4000.00 | 0.892 | 3566.49 | |
24 | 4000.00 | 0.00 | 4000.00 | 0.887 | 3548.74 | |
25 | 4000.00 | 0.00 | 4000.00 | 0.883 | 3531.09 | |
26 | 4000.00 | 0.00 | 4000.00 | 0.878 | 3513.52 | |
27 | 4000.00 | 0.00 | 4000.00 | 0.874 | 3496.04 | |
28 | 4000.00 | 0.00 | 4000.00 | 0.870 | 3478.65 | |
29 | 4000.00 | 0.00 | 4000.00 | 0.865 | 3461.34 | |
30 | 4000.00 | 0.00 | 4000.00 | 0.861 | 3444.12 | |
31 | 4000.00 | 0.00 | 4000.00 | 0.857 | 3426.98 | |
32 | 4000.00 | 0.00 | 4000.00 | 0.852 | 3409.93 | |
33 | 4000.00 | 0.00 | 4000.00 | 0.848 | 3392.97 | |
34 | 4000.00 | 0.00 | 4000.00 | 0.844 | 3376.09 | |
35 | 4000.00 | 0.00 | 4000.00 | 0.840 | 3359.29 | |
36 | 4000.00 | 3000.00 | 7000.00 | 0.836 | 5849.51 | |
Value Of Package | 141991.00 | $ | ||||