Respuesta :
qANSWER
Company B will pay more
Company A =
EXPLANATION
Both companies start by paying $42,000 per year.
Company A offers an increase of $1000 per year.
This means that after n years, he would have earned:
Earnings = 42000 + 1000n
where n = number of years after the first year
So, after 6 years, he would have worked 5 years after the first, so his earnings would be:
Earnings = 42000 + 1000(5) = 42000 + 5000
Earnings = $47000
Company B offers 7% more than the previous year. That means that his earnings are compounded.
His earnings can then be represented as:
[tex]\text{ Earnings = P(1 + }\frac{r}{100})^t[/tex]where P = initial salary = $42000
r = interest rate = 7%
t = number of years spent = 6 years
Therefore, his earnings after the 6th year will be:
[tex]\begin{gathered} \text{ Earnings = 42000(1 + }\frac{7}{100})^6 \\ \text{ Earnings = 42000(1 + 0.07)}^6=42000(1.07)^6 \\ \text{ Earnings = }42000\cdot\text{ 1.501} \\ \text{Earnings = \$63042} \end{gathered}[/tex]He would have earned $63042.
Therefore, Company B will pay more.
