SUPPOSE you had the choice of The following two jobs:—

Job 1: Starting with an Annual salary of $1000, And a $200 increase every year.

Job 2: Starting with an Annual salary of $1000 And a $50 increase every Six months.

In all other respects,
The two jobs are exactly alike.

Which is the better offer?

Think carefully and
Decide on your answer
Before turning this page.
Did you say Job 1 is better?
And did you reason as follows?
Since Job 2 has an increase
Of $50 every six months,
It must have an annual increase of $100
And therefore it is not as good
As Job 1 which has
An annual increase of $200.

Well, you are wrong!
For, examine carefully
The earnings written out below:

Expected First half of year Second half of year Total for the year
First Year Job 1 $500 $500 $1000
Job 2 500 550 1050
Second Year Job 1 600 600 1200
Job 2 600 650 1250
Third Year Job 1 700 700 1100
Job 2 700 750 1450
Fourth Year Job 1 800 800 1600
Job 2 800 850 1650

Note that: —

(1) Job 1 pays $200 more each year Than it did the previous year.

(2) Job 2 pays $50 more every half-year than it did during the previous half-year.

All this is in accordance with The promises originally made.

And yet

Job 2 brings in $50 more every year Than Job 1 does.

And you can easily see that This will continue to be true No matter what number of years Is considered.

That is, of course,


The Income Tax People Do something to Upset

These calculations.