Transcript Personal Finance

Personal Finance
Computing Compensation
• Key Words
– Compensation
– Inflation
– Raise
– Benefit Package
– Salary
Personal Finance
Computing Compensation
• Abstract
– The student will be able to calculate
salary expectations given a base
salary, Inflation percentage, and
raise expectation. They will also be
introduced to Benefit Package
verses Union Dues and what you are
getting in reality.
Personal Finance
Computing Compensation
• Materials
– Projector
– Computer
– Student Calculator
– Paper & #2 Pencil
Personal Finance
Computing Compensation
Computing Compensation
Even if you are more interested
in having a career that is
fascinating, offers a chance to
help people, or lets you travel
all over the world, earning
enough money to support your
lifestyle whatever it is – is still
important.
Computing Compensation
Compensation figure or base salary and
given an approximate inflation figure
and an approximate raise per year
figure can be calculated to give the
potential employee a reasonable
expectation of earnings.
Computing Compensation
• We will be looking at 3 different jobs
– Kindergarten Teacher
$37,500
– Computer Programmer
$44,700
– Automotive Mechanic
$27,000
How much will the Kindergarten teacher
make next year if she will get base
salary + 3% inflation and a 2% raise.
•Base Salary + 3% of the Base Salary
+ 2% of the Base Salary = 2nd year
earnings.
•How would you set this problem
up?
•Figure the answer
How much will the Kindergarten teacher
make next year if she will get base
salary + 3% inflation and a 2% raise.
• 37,500 + 37500 * 3% + 37500 * 2% =
2nd year earnings
• 37,500 + 1,125 + 750 = 39,375
• Or Base Salary Times 105%
• 37,500 * 1.05 = 39,375
How much will the Computer
Programmer make next year if he will
get base salary + 3% inflation and a 2%
raise.
•Base Salary + 3% of the Base Salary
+ 2% of the Base Salary = 2nd year
earnings.
•How would you set this problem
up?
•Figure the answer
How much will the Computer
Programmer make next year if he will
get base salary + 3% inflation and a 2%
raise.
• 44,700 + 44,700 * 3% + 44,700 * 2% =
2nd year earnings
• 44,700 + 1,341 + 894 = 46,935
• Or Base Salary Times 105%
• 44,700 * 1.05 = 46,935
How much will the Automotive
Mechanic make next year if he will get
base salary + 3% inflation and a 2%
raise.
•Base Salary + 3% of the Base Salary
+ 2% of the Base Salary = 2nd year
earnings.
•How would you set this problem
up?
•Figure the answer
How much will the Automotive
Mechanic make next year if he will get
base salary + 3% inflation and a 2%
raise.
• 27,000 + 27,000 * 3% + 27,000 * 2% =
2nd year earnings
• 27,000 + 810 + 540 = 28,350
• Or Base Salary Times 105%
• 27,000 * 1.05 = 28,350
In ten years, the Computer
Programmer’s salary will be?
•
•
•
•
A
B
C
D
$72,811.59
$80,000.00
$79,501.77
$75,610.10
• How would you find
•
•
the answer?
Set the problem up
Calculate and give the
correct answer
In ten years, the Computer
Programmer’s salary will be?
• Multiply current salary by 1.05 to find the
salary for the first year . Then multiply
that salary by 1.05 to find the second
year, and so on up to the tenth year.
In ten years, the Computer
Programmer’s salary will be?
• 44,700 * 1.05 = 46,935 First year
• 46,935 * 1.05 = 49,281.75 Second year
• 49,281.75 * 1.05 = 51,745.83 Third year
• 51,745.83 * 1.05 = 54,333.12 Fourth year
• 54,333.12 * 1.05 = 57,049.77 Fifth year
In ten years, the Computer
Programmer’s salary will be?
• 57,049.77 * 1.05 = 59,902.25 Sixth year
• 59,902.25 * 1.05 = 62,897.36 Seventh yr.
• 62,897.36 * 1.05 = 66,042.22 Eighth year
• 66,042.22 * 1.05 = 69,344.33 Ninth year
• 69,344.33 * 1.05 = 72,811.54 Tenth year
In ten years, the Computer
Programmer’s salary will be?
• The correct answer is A $72,811.59
• His salary increased by $28,111.54
An auto assembly worker receives an annual
benefits package, including health insurance,
tuition reimbursement, and free company-run
day care, worth $4,000 a year. She has
deducted from her paycheck $310 a year for
union dues. How much will her total
employment package be worth?
• How do you calculate the answer?
An auto assembly worker receives an annual
benefits package, including health insurance,
tuition reimbursement, and free company-run
day care, worth $4,000 a year. She has
deducted from her paycheck $310 a year for
union dues. How much will her total
employment package be worth?
• Take the value of the benefit package
subtract the union dues = Worth of the
benefit package
• 4,000 – 310 = 3,690
Go on the internet and find what your
job choice is currently making as a
salary.
• What can you expect to make next
year with a 1.5% cost of living increase
and a 1% raise.
• What will you make in 5 years?
• What will you make in the next 5 years
if inflation raises to 3% and you get a
2% raise each year?
• Due tomorrow = 100 points