Answer :
The raise in earning at 3.5% are = $ 50,000 * 3.5 /100 = $ 1,750
Negotiator gives a one time bonus of $ 2,000. For this year you benefit by $2000- $1,750 = $250. U can earn interest on this amount every year. It grows.
The amount becomes after one year with a 10% interest : $ 275 only
But a raise in salary means every year you get $ 1,750 and you get the interest on that amount too. So you get better benefit with the increment in the salary than a one time offer. The advantage is only that u get an extra $250 in the first year in hand. But after one year, the advantage of salary hike is more.
Negotiator gives a one time bonus of $ 2,000. For this year you benefit by $2000- $1,750 = $250. U can earn interest on this amount every year. It grows.
The amount becomes after one year with a 10% interest : $ 275 only
But a raise in salary means every year you get $ 1,750 and you get the interest on that amount too. So you get better benefit with the increment in the salary than a one time offer. The advantage is only that u get an extra $250 in the first year in hand. But after one year, the advantage of salary hike is more.