Bobur finished his degree in finance in Tashkent and received two job offers on the same day. A bank offered a starting salary of 30,000 dollars a year, rising by 3,000 dollars each year. A consulting firm offered 36,000 dollars to start, rising by 1,500 dollars each year.
His friends told him to take the higher number. Bobur wrote both offers out year by year instead. The bank would pay 30, 33, 36, 39 and then 42 thousand dollars. The firm would pay 36, 37.5, 39, 40.5 and then 42 thousand. The two salaries would be equal in the fifth year, at 42,000 dollars each.
Then he added them up. Over the first five years, the bank would pay five times the average of 30 and 42 thousand, which is 180,000 dollars. The firm would pay five times the average of 36 and 42 thousand, which is 195,000 dollars. The firm was 15,000 dollars ahead.
But Bobur did not plan to stay only five years. After the fifth year the bank's salary grows faster every year. In the tenth year the bank would pay 57,000 dollars and the firm 49,500. Over ten years the bank's total would be 435,000 dollars and the firm's 427,500. The bank would overtake the firm, though only by 7,500 dollars.
The choice, he realised, depended on a single question: how long would he stay? He also noticed that both raises were only promises, while the starting salaries were guaranteed.
He chose the consulting firm, which offered more experience early on, and wrote both sequences in a notebook. In five years, he told himself, he would open it again and compare.