Present value of lifetime earnings (1 of 3) Arun, a high-school graduate, is considering whether to pursue a master's degree or start working Immediately. If he decides to pursue a master's, he will spend $40,000 on tuition and books for his undergraduate studies (perlod 1) and $130,000 on tuition and books for his master's (period 2), and afterward he will earn $900,000 for the remainder of his career (period 3). If he decides to start working immediately, he will earn $70,000 per period during the first two periods and $500,000 over the course of the third period. His discount rate is 11%. What is Arun's present value of pursuing a master's degree?

Present value of lifetime earnings (1 of 3) Arun, a high-school graduate, is considering whether to pursue a master's degree or start working Immediately. If he decides to pursue a master's, he will spend $40,000 on tuition and books for his undergraduate studies (perlod 1) and $130,000 on tuition and books for his master's (period 2), and afterward he will earn $900,000 for the remainder of his career (period 3). If he decides to start working immediately, he will earn $70,000 per period during the first two periods and $500,000 over the course of the third period. His discount rate is 11%. What is Arun's present value of pursuing a master's degree?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 28CTQ: Why do you mink the U.S. experience with inflation over the last 50 years has been so much milder...

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