Question

Mr. Jackson has received two salary offers at two different companies. Company A pays $40,000 per year with an increase of $2,000 each year after the first year. Company B pays $30,000 per year with an increase of $5,000 each year after the first year. Which statement is true about Mr. Jackson’s potential salary in 5 years at each company?

A He will earn $2,000 more with Company A

B He will earn $2,000 more with Company B

C He will earn $5,000 more with Company A

D He will earn $5,000 more with Company B

Answer 1

Option B

He will earn $2,000 more with Company B

Explanation:

Company A

First year-40,000

Second year=40000+2000=42000

Third year=42000+2000=44000

Fourth year=44000+2000=46000

Fifth year=46000+2000=48000

Company B

First year=30000

Second year=30000+5000=35000

Third year=35000+5000=40000

Fourth year=40000+5000=45000

Fifth year=45000+5000=50000

Difference after five years is 50000-48000=2000

Therefore, company B would have given him $2000 more than company company A