Question

A company offers its employees the choice of two contracts. The first contract gives an initial salary of 15000/year rising it by a 1000 every year. The second contract gives an employee an initial salary of 14000 a year and a rise of 10% each year. Which of the two contracts yields a higher income over 5 years? [8 marks].

Answer 1

So, since $21000 is $1000 more than just $20000, contract 2 is the better option. I hope this helps! :)

Answer 2

To answer this question, start by identifying the total amount of income after 5 years for the first contract.
Since you start with 15,000 and get 1000 more each year, write an expression that represents this relationship.
15000 + 1000(5)

Multiply the parenthesis to begin to simplify your expression.
This leaves you with:
15000 + 5000

Add to find the total salary after five years with the first contract.
This ends up with:
$20,000

For the second contract, you have a diffferent rate of increase. Start by finding what one percent of the initial salary is. To do this, divide 14000 by 100.
14000/100 = 140
Then to find ten percent, multiply that number by 10.
140 x 10 =1400

So, each year you add 1400 dollars to the salary.
Now, using this information, set up an expression to model the salary for contract 2 after 5 years.
This should leave you with:
14000 + 1400(5)

Begin to simplify by multiplying what’s in the parenthesis.
1400 x 5 = 7000
Now rewrite your expression:
14000 + 7000

Add to find the total salary after 5 years with contract 2.
14000 + 7000 = 21000

So the salary with contract 2 is $21,000.



So, since $21000 is $1000 more than just $20000, contract 2 is the better option. I hope this helps! :)