personal finance computing compensation

Personal Finance Personal Finance Computing CompensationComputing Compensation

• Key WordsKey Words– CompensationCompensation– InflationInflation– RaiseRaise– Benefit PackageBenefit Package– SalarySalary


• AbstractAbstract– The student will be able to The student will be able to

calculate salary expectations given calculate salary expectations given a base salary, Inflation percentage, a base salary, Inflation percentage, and raise expectation. They will and raise expectation. They will also be introduced to Benefit also be introduced to Benefit Package verses Union Dues and Package verses Union Dues and what you are getting in reality. what you are getting in reality.


• MaterialsMaterials– ProjectorProjector– ComputerComputer– Student CalculatorStudent Calculator– Paper & #2 PencilPaper & #2 Pencil

Personal FinancePersonal Finance

Computing CompensationComputing Compensation

Computing Computing CompensationCompensation

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.


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.


• We will be looking at 3 different jobsWe will be looking at 3 different jobs

– Kindergarten TeacherKindergarten Teacher $37,500$37,500

– Computer ProgrammerComputer Programmer $44,700$44,700

– Automotive MechanicAutomotive Mechanic $27,000$27,000

How much will the Kindergarten How much will the Kindergarten teacher make next year if she will teacher make next year if she will get base salary + 3% inflation and get base salary + 3% inflation and a 2% raise.a 2% raise.•Base Salary + 3% of the Base Base Salary + 3% of the Base

Salary + 2% of the Base Salary = Salary + 2% of the Base Salary = 22ndnd year earnings. year earnings.

•How would you set this problem How would you set this problem up?up?

•Figure the answerFigure the answer

How much will the Kindergarten How much will the Kindergarten teacher make next year if she will teacher make next year if she will get base salary + 3% inflation and get base salary + 3% inflation and a 2% raise.a 2% raise.

• 37,500 + 37500 * 3% + 37500 * 2% 37,500 + 37500 * 3% + 37500 * 2% = 2= 2ndnd year earnings year earnings

• 37,500 + 1,125 + 750 = 39,37537,500 + 1,125 + 750 = 39,375

• Or Base Salary Times 105%Or Base Salary Times 105%

• 37,500 * 1.05 = 39,37537,500 * 1.05 = 39,375

How much will the Computer How much will the Computer Programmer make next year if he Programmer make next year if he will get base salary + 3% inflation will get base salary + 3% inflation and a 2% raise.and a 2% raise.

•Base Salary + 3% of the Base Base Salary + 3% of the Base Salary + 2% of the Base Salary = Salary + 2% of the Base Salary = 22ndnd year earnings. year earnings.



How much will the Computer How much will the Computer Programmer make next year if he Programmer make next year if he will get base salary + 3% inflation will get base salary + 3% inflation and a 2% raise.and a 2% raise.

• 44,700 + 44,700 * 3% + 44,700 * 2% 44,700 + 44,700 * 3% + 44,700 * 2% = 2= 2ndnd year earnings year earnings

• 44,700 + 1,341 + 894 = 46,93544,700 + 1,341 + 894 = 46,935


• 44,700 * 1.05 = 46,93544,700 * 1.05 = 46,935

How much will the Automotive How much will the Automotive Mechanic make next year if he will Mechanic make next year if he will get base salary + 3% inflation and get base salary + 3% inflation and a 2% raise.a 2% raise.

•Base Salary + 3% of the Base Base Salary + 3% of the Base Salary + 2% of the Base Salary = Salary + 2% of the Base Salary = 22ndnd year earnings. year earnings.



How much will the Automotive How much will the Automotive Mechanic make next year if he will Mechanic make next year if he will get base salary + 3% inflation and get base salary + 3% inflation and a 2% raise.a 2% raise.

• 27,000 + 27,000 * 3% + 27,000 * 2% 27,000 + 27,000 * 3% + 27,000 * 2% = 2= 2ndnd year earnings year earnings

• 27,000 + 810 + 540 = 28,35027,000 + 810 + 540 = 28,350


• 27,000 * 1.05 = 28,35027,000 * 1.05 = 28,350

In ten years, the Computer In ten years, the Computer Programmer’s salary will be?Programmer’s salary will be?

• AA $72,811.59$72,811.59

• BB $80,000.00$80,000.00

• CC $79,501.77$79,501.77

• DD $75,610.10$75,610.10

• How would you find How would you find the answer?the answer?

• Set the problem upSet the problem up

• Calculate and give Calculate and give the correct answerthe correct answer


• Multiply current salary by 1.05 to find Multiply current salary by 1.05 to find the salary for the first year . Then the salary for the first year . Then multiply that salary by 1.05 to find multiply that salary by 1.05 to find the second year, and so on up to the the second year, and so on up to the tenth year.tenth year.


• 44,700 * 1.05 = 46,935 First year44,700 * 1.05 = 46,935 First year

• 46,935 * 1.05 = 49,281.75 Second year46,935 * 1.05 = 49,281.75 Second year

• 49,281.75 * 1.05 = 51,745.83 Third year49,281.75 * 1.05 = 51,745.83 Third year

• 51,745.83 * 1.05 = 54,333.12 Fourth 51,745.83 * 1.05 = 54,333.12 Fourth yearyear

• 54,333.12 * 1.05 = 57,049.77 Fifth year54,333.12 * 1.05 = 57,049.77 Fifth year


• 57,049.77 * 1.05 = 59,902.25 Sixth year57,049.77 * 1.05 = 59,902.25 Sixth year

• 59,902.25 * 1.05 = 62,897.36 Seventh yr.59,902.25 * 1.05 = 62,897.36 Seventh yr.

• 62,897.36 * 1.05 = 66,042.22 Eighth year62,897.36 * 1.05 = 66,042.22 Eighth year

• 66,042.22 * 1.05 = 69,344.33 Ninth year66,042.22 * 1.05 = 69,344.33 Ninth year

• 69,344.33 * 1.05 = 72,811.54 Tenth year69,344.33 * 1.05 = 72,811.54 Tenth year


• The correct answer is A $72,811.59The correct answer is A $72,811.59

• His salary increased by $28,111.54His salary increased by $28,111.54

An auto assembly worker receives an An auto assembly worker receives an annual benefits package, including annual benefits package, including health insurance, tuition health insurance, tuition reimbursement, and free company-run reimbursement, and free company-run day care, worth $4,000 a year. She has day care, worth $4,000 a year. She has deducted from her paycheck $310 a deducted from her paycheck $310 a year for union dues. How much will her year for union dues. How much will her total employment package be worth?total employment package be worth?

• How do you calculate the answer?How do you calculate the answer?

An auto assembly worker receives an An auto assembly worker receives an annual benefits package, including annual benefits package, including health insurance, tuition health insurance, tuition reimbursement, and free company-run reimbursement, and free company-run day care, worth $4,000 a year. She has day care, worth $4,000 a year. She has deducted from her paycheck $310 a deducted from her paycheck $310 a year for union dues. How much will her year for union dues. How much will her total employment package be worth?total employment package be worth?

• Take the value of the benefit package Take the value of the benefit package subtract the union dues = Worth of subtract the union dues = Worth of the benefit packagethe benefit package

• 4,000 – 310 = 3,6904,000 – 310 = 3,690

Go on the internet and find what Go on the internet and find what your job choice is currently your job choice is currently making as a salary.making as a salary.

• What can you expect to make next year What can you expect to make next year with a 1.5% cost of living increase and a with a 1.5% cost of living increase and a 1% raise.1% raise.

• What will you make in 5 years?What will you make in 5 years?

• What will you make in the next 5 years What will you make in the next 5 years if inflation raises to 3% and you get a if inflation raises to 3% and you get a 2% raise each year?2% raise each year?

• Due tomorrow = 100 pointsDue tomorrow = 100 points

personal finance computing compensation

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