jesse works for an engineering firm earning $54,000 per year. jesse is 53 years old and plans on retiring at…

jesse works for an engineering firm earning $54,000 per year. jesse is 53 years old and plans on retiring at age 65. hes considering working part - time so that he can work on another degree. his new degree would take him 3 years to earn and cost a total of $30,000. after getting the degree, jesse will make $75,000 per year. do you think that the new degree is worth the investment? explain your reasoning.

jesse works for an engineering firm earning $54,000 per year. jesse is 53 years old and plans on retiring at age 65. hes considering working part - time so that he can work on another degree. his new degree would take him 3 years to earn and cost a total of $30,000. after getting the degree, jesse will make $75,000 per year. do you think that the new degree is worth the investment? explain your reasoning.

Answer

Answer:

Yes, the new degree is worth the investment.

Explanation:

Step1: Calculate lost - income during study

Jesse currently earns $54000$ per year. For 3 years of part - time study, the lost income is $54000\times3 = 162000$. The cost of the degree is $30000$. So the total cost is $162000 + 30000=192000$.

Step2: Calculate increased income after degree

After getting the degree, Jesse will earn $75000$ per year instead of $54000$ per year. The annual increase in income is $75000 - 54000 = 21000$.

Step3: Calculate pay - back time

The pay - back time for the investment is $\frac{192000}{21000}\approx9.14$ years. Jesse has $65 - 53 - 3=9$ years left until retirement after getting the degree. But considering potential future salary increases, job security, and non - financial benefits like career satisfaction, the degree is likely worth it. Also, the pay - back period is very close to the remaining working years, and over time, the additional income will still contribute to his overall financial well - being.