You work 40 hours/week for 50 weeks and are given the option to be paid hourly or to go on salary. In which situation will you earn the most?
A)$15.00/hour and $5,000 in tips
OR
B)$35,000/year with a 10% bonus
To calculate which option will earn the most, we need to do some math:
Option A:
- Hourly wage = $15.00
- Hours worked = 40/week x 50 weeks = 2,000 hours
- Tips = $5,000
- Total income = (hourly wage x hours worked) + tips
= ($15.00/hour x 2,000 hours) + $5,000
= $35,000 + $5,000
= $40,000
Option B:
- Annual salary = $35,000
- Bonus = 10% of salary = $3,500
- Total income = Salary + Bonus
= $35,000 + $3,500
= $38,500
Therefore, option A with an hourly rate of $15.00/hour and $5,000 in tips will earn the most at $40,000 total income.