7
QuizMultiple Choice

Income — Quiz

Question 7 • Financial Math

Kennedy has received two job offers. The first job, at Company A, offers a monthly salary of $4,000, a yearly bonus of $6,000, and includes health insurance. The second job, at Company B, offers a monthly salary of $4,200, a yearly bonus of $5,000, but does not include health insurance. Which job would provide Kennedy with a higher net annual income assuming that Kennedy needs to have health insurance?

Answer
A
Both offer the same income.
B
Company B
C
The decision depends on the value of health insurance benefits.
D
Company A

Explanation

Company A pays $4,000 × 12 + $6,000 = $54,000 per year, plus health insurance. Company B pays $4,200 × 12 + $5,000 = $55,400 per year, but Kennedy would need to pay for health insurance. Company B is better if that insurance costs less than $1,400 per year; Company A is better if it costs more, so the choice depends on the value or cost of the health insurance benefits.

AI-written and checked against the verified answer.

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