Question

You give up a full-time salary of $40,000 a year to go to school for 2 years. The total cost of going to school is $30,000. If you 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

$68,000

Explanation:

we have to determine the total economic costs of going to college = ($40,000 x 2) + ($30,000 x 2) = $140,000

since we want to recover our "college investment" in 5 years or less, then we must earn at least $140,000 / 5 = $28,000 more per year

the minimum salary that we should earn after graduating = $40,000 (our current salary) + $28,000 (to recover college costs) = $68,000