Step-by-Step Solution:
To determine the best job offer for Caitlin, it's important to calculate the net annual income for both jobs after accounting for the cost of living, including rent and utilities. Here’s how we can do it step-by-step:
Job 1: Albuquerque, NM
1. Annual Salary: \[tex]$54,000
2. Annual Benefits (Bonuses): \$[/tex]2,500
3. Monthly Rent and Utilities: \[tex]$925
To find the annual rent and utilities cost, we multiply the monthly cost by 12:
\[
925 \times 12 = 11,100
\]
Now, we add the annual salary and bonuses and subtract the annual rent and utilities:
\[
Income_{Job1} = \$[/tex]54,000 + \[tex]$2,500 - \$[/tex]11,100 = \[tex]$45,400
\]
Job 2: Ann-Arbor, MI
1. Annual Salary: \$[/tex]61,000
2. Annual Benefits (Bonuses): None
3. Monthly Rent and Utilities: \[tex]$940
Similar to Job 1, we calculate the annual rent and utilities cost:
\[
940 \times 12 = 11,280
\]
Subtract the annual rent and utilities from the annual salary:
\[
Income_{Job2} = \$[/tex]61,000 - \[tex]$11,280 = \$[/tex]49,720
\]
Comparison:
- Job 1 net annual income: \[tex]$45,400
- Job 2 net annual income: \$[/tex]49,720
From the calculations, it's clear that Job 2 offers Caitlin a higher annual income after accounting for the cost of living. Therefore, Job 2 is the better choice because the annual income after rent and utilities is \[tex]$49,720, whereas for Job 1, it's \$[/tex]45,400.
