Question

Brenda has an associate’s degree earning the median salary. She wants to quit working and go to college to get just a basic bachelor’s degree. If she completes her degree in 2 years and it costs $15,000, how long will it take her to recover her investment assuming that she earns the median salary? A graph titled Median Annual Household Income by Educational Attainment of Householder, 1997. Professional degree, 92,228 dollars; doctorate degree, 87,232 dollars; master's degree, 68,115 dollars; Bachelor's degree or more, 63,292 dollars; Bachelor's degree, 59,048 dollars; associate degree, 45,258 dollars; some college, no degree, 40,015 dollars; high school graduate, 33,779 dollars; ninth to twelfth grade, 19,851 dollars; than twelfth grade, 15,541 dollars. a. almost 6 years b. almost 7 years c. almost 8 years d. almost 9 years

Answer 1

C

Explanation:

Answer 2

a. almost 8 years

Explanation:

Brenda's expected annual increase in salary is ...

$63,292 -45,258 = $18,034

If we assume that Brenda's cost of education includes going without 2 years' salary as well as the cost of tuition, her degree's total cost will be ...

2×$45,258 +15,000 = $105,516

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Once Brenda starts earning again, she is recovering this cost at the rate of $18,034 per year, so it will take ...

$105,516/($18,034 /yr) = 5.85 yr

to recover that cost.

Since Brenda spent 2 years in school, from the time she decides to start school until she has recovered her cost, it will be 2 + 5.85 = 7.85 years, almost 8 years.

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If Brenda can continue working while going to school, she can recover her tuition cost in about 10 months after graduation.