Answer:
Yes, time play a factor in his decision, because after 3 years, option a is better, but after 9 years, option b is better.
Explanation:
The following information is missing:
Mr. Nicholson accepts a job that pays an annual salary of $60,000. In his employment contract, he is given the option of choosing a) an annual raise of $3,500 or b) an annual raise of 5% of his current salary.
The function that describes each situation is:
a) f(x) = 60,000 + 3,500*(x-1)
b) f(x) = 60,000*1.05^(x-1)
where x represents years and f(x) his salary.
Mr. Nicholson’s potential income for three years and nine years for each situation are:
a) f(3) = 60,000 + 3,500*(3-1) = $67,000
f(9) = 60,000 + 3,500*(9-1) = $88,000
b) f(3) = 60,000*1.05^(3-1) = $66,150
f(9) = 60,000*1.05^(9-1) = $88,647