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Answer to Question #59993 in Other Economics for Steve Bond

Question #59993
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?
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