# Assume that you are earning \$50,000 per year and want a 3.5% raise. A negotiator offers you instead a one-time bonus of \$2,000. what are the advantages and disadvantages of her offer?

1
by sweetysiri92

2014-09-12T13:30:56+05:30

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The raise in earning at 3.5% are = \$ 50,000 * 3.5 /100 = \$ 1,750

Negotiator gives a one time bonus of \$ 2,000. For this year you benefit by \$2000- \$1,750 = \$250.  U can earn interest on this amount every year. It grows.
The amount becomes after one year with a 10% interest : \$ 275 only

But a raise in salary means every year you get \$ 1,750 and you get the interest on that amount too. So you get better benefit with the increment in the salary than a one time offer.  The advantage is only that u get an extra \$250 in the first year in hand. But after one year, the advantage of salary hike is more.

thanks
thanx n u r welcom