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Question 916694: "Steve, I need you to take a 50% pay cut, but than you'll get a 75% raise in 6 months. If Steve presently makes $10 per hour, how much will he make after the cut? After the raise? Should he take this deal?
Thank you to whoever helps me with this math problem!
Answer by jim_thompson5910(35256)   (Show Source):
You can put this solution on YOUR website!
He starts at $10 an hour.
He takes a 50% pay cut, so he goes from $10 an hour to $5 an hour (50% of $10 is $5, $10-$5 = $5)
He makes $5 an hour after the pay cut.
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Then he'll get a 75% raise in 6 months.
75% of $5 = 0.75*5 = 3.75
Add this to $5: 5+3.75 = 8.75
His new wage after the raise is $8.75 an hour
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Summary: He goes from $10 per hour to $5 per hour, then to $8.75 an hour. This is a horrible deal because he not only has to deal with awful pay for 6 months ($5 an hour, possibly below minimum wage) and then his final wage is below where he started. If Steve didn't know his math, this may sound like a good deal. However, doing the math shows us otherwise. We haven't even factored in inflation, or other expenses (eg taxes, social security, etc), which take even more away.
Should he take this deal? No, he should NOT take this deal. If he does, then it will take him a long time just to get back to his original wage of $10 (this is assuming he even gets a raise at all). This will happen with inflation in the background going on which will ultimately lower his standard of living.
Let me know if you need more help or if you need me to explain a step in more detail.
Feel free to email me at jim_thompson5910@hotmail.com
or you can visit my website here: http://www.freewebs.com/jimthompson5910/home.html
Thanks,
Jim
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