Answer to Question #59993 in Other Economics for Steve Bond
Suppose going to college costs 20,000 a year. The average earnings of a highschool graduate are 20,000 a year. By going to college, suppose one can expect to earn 50,000 a year. Set up the expressions for the present value of benefits and costs, and the net present value of a college education if the interest rate is 10%.
How does this change if the interest rate is 15%? Why is the investment in college less attractive when the interest rate is high?
The clock is ticking. The coffee is brewing. The stress intensifies. And all you’ve written in the past 15 minutes…
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