Respuesta :
If you take the question very literally, you have just joined the organisation and been offered two options. The present value of each is still $0 as you have not yet selected either or received any payment. However, assuming the question is aimed at establishing which option is better over the two year period, the following explanation applies.
Salary arrangement 1 is 7,400 monthly for 24 months
Assuming the whole salary is invested each month, and the annual interest rate is 6%, and that it is paid at the start of each month then the following formula will apply:
Present value = previous value + (previous value * interest rate) + monthly payment
Using this formula for a 24 month period results in present value of $188,196.47
Salary arrangement 2 is 33,000 initially and 6,100 monthly for 24 months
Using the same assumptions as above, and the same formula for 24 month period results in present value of $191,692.01
The main difference is the initial payment which is accruing interest throughout the period and therefore salary arrangement 2 results in a higher present value.