Question

You give up a full time salary of 45,000 a year to go to school for 2 years the total cost of going to school is 30,000, if want to be able to recover your investment in 5 years or less what is the minimum salary you would need to earn upon earning your degree?

Answer 1

I would say that this person has lost out on 2 years salary while in school plus 5 year repayment period. Total amount divided over 5 years is:

( (2+5)(45,000) + 30,000 ) / 5 =

(7(45,000)+30,00)/5 = 69,000 salary

Answer 2

69,000

Explanation:

Given,

There is loss of 45,000 per year for two years,

So, the total lost = 2 × 45000 = 90,000

Also, the cost of school going = 30,000

∴ the total recovering amount = 90,000 + 30,000 = 120,000

If this amount must recover in 5 years or less than 5,

Then, the minimum recovering amount per year =
`(120000)/(5)` = 24,000

Now, the original salary per year = 45,000

Hence, the new salary per year = original salary + recovering amount

= 45,000 + 24,000

= 69,000