Question

Liam is a computer systems analyst and is looking to change to a company that offers more opportunities for advancement. He has job offers from two companies that look promising.

Liam’s Job Offer Comparison

Job 1: Seattle, WA
Job 2: Silicon Valley, CA
Salary
$78,000
$100,000

Benefits
$4,000 bonuses,
health insurance,
401K
$2,500 bonuses,
health insurance,
401K
Average Monthly Rent & Utilities
$1,350
$3,150


Which company is a better choice based on annual income after housing and utility costs?
Job 2 is a better choice because it will have a salary and benefits worth $20,500 more than job 1.
Job 2 is a better choice because the annual income after housing is expected to be $140,300 but job 1 is expected to be $98,200.
Job 1 is a better choice because the annual income after housing is $65,800 but that of job 2 is $64,700.
Job 1 is a better choice because annual income after benefits and housing will be $109,800 but the annual income for job 2 will be $92,200.

Answer 1

Compute total annual pay (salary + cash bonus) minus annual housing cost:

Job 1: (78,000 + 4,000) = 82,000. Housing = 1,350 × 12 = 16,200. After housing = 82,000 − 16,200 = 65,800.

Job 2: (100,000 + 2,500) = 102,500. Housing = 3,150 × 12 = 37,800. After housing = 102,500 − 37,800 = 64,700.

So Job 1 is the better choice based on annual income after housing and utilities: $65,800 vs. $64,700 (a $1,100 advantage).