2. From the College Scorecard, median annual cost of attending college is $12,871. Median salary for college attendees is $58,880 (using past data based on tax data instead of surveys). Median salary of someone who does not attend college is roughly $30,336. Suppose everyone retires at age 65, everyone leaves high school at age 18, and college lasts 4 years. Within the same year, costs and earnings arrive simultaneously. a. What is the present discounted value of working immediately instead of going to college if the discount rate is 0.05 (R=1(1.05))? What is the present discounted value of going to college? Financially speaking, is going to college a good deal (assuming you would be continuously working and no wage growth)? Hint: 1+R+R²+..+R46=(1-R47)/(1-R). 1+R+R²+R³=(1-R*)/(1-R). Rª+R$+...+R46=(R4- R47)/(1-R).

2. From the College Scorecard, median annual cost of attending college is $12,871. Median salary for college attendees is $58,880 (using past data based on tax data instead of surveys). Median salary of someone who does not attend college is roughly $30,336. Suppose everyone retires at age 65, everyone leaves high school at age 18, and college lasts 4 years. Within the same year, costs and earnings arrive simultaneously. a. What is the present discounted value of working immediately instead of going to college if the discount rate is 0.05 (R=1(1.05))? What is the present discounted value of going to college? Financially speaking, is going to college a good deal (assuming you would be continuously working and no wage growth)? Hint: 1+R+R²+..+R46=(1-R47)/(1-R). 1+R+R²+R³=(1-R*)/(1-R). Rª+R$+...+R46=(R4- R47)/(1-R).

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter11: Labor Markets

Section: Chapter Questions

Problem 3SQP

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