## Friday, January 22, 2016

### Trick: How to mentally convert and calculate rate of pay

I have been real busy lately, so I will share only a short tip this week. However, I have some cool new projects/concepts I have been working on, such as a term rewriting system, so keep checking back.

I have been interviewing for a new job, its time to move up. Often I am quoted an annual salary, and I want to see how that compares with hourly wage. I do this calculation in my head, on the spot, and so can you. This technique leverages Estimation/Approximation.

Since 40hrs/week times 52wks/year = 40 * 52 = 2080 full-time work hours in a year.
We can use approximation by multiplying or dividing by 2000. Since we know that 2 * 1000 = 2000, multiplying/diving by 2000 is trivial. Remember, to multiply or divide by any power of ten, now matter how great, just count the zeros and just shift the decimal place once to the right, or towards a smaller quantity, that number of times. e.g. 43.50 * 1000 = 43,500

'So how large is the error from estimating?', One might ponder... Well ponder no more! Hark:

```Estimation Error - From hourly to yearly--

\$12/HR @ 40HR/WK

\$24,000/YR - Estimated
\$24,960/YR - Actual
-------
-\$960  - Difference

\$25/HR @ 40HR/WK

\$50,000/YR - Estimated
\$52,000/YR - Actual
-------
\$2,000/YR - Difference

\$50/HR @ 40HR/WK

\$100,000/YR - Estimated
\$104,000/YR - Actual
--------
\$4,000  - Difference

Estimation Error - From yearly to hourly--

\$25K/YR @ 40HR/WK

\$12.50/HR - Estimated
\$12.02/HR - Actual
------
-\$0.48/HR  - Difference

\$50K/YR @ 40HR/WK

\$25.00/HR - Estimated
\$24.04/HR - Actual
------
-\$0.96/HR

\$100K/YR @ 40HR/WK

\$50.00/HR - Estimated
\$48.07/HR - Actual
------
-\$1.92/HR

```