you give up a full - time salary of $45,000 a year to go to school for 2 years. the total cost of going to…

you give up a full - time salary of $45,000 a year to go to school for 2 years. the total cost of going to school is $30,000. if you want to be able to recover your investment in 5 years or less, what is the minimum salary you would need to earn upon earning your degree?\na. $51,000\nb. $60,000\nc. $69,000\nd. $75,000\nplease select the best answer from the choices provided\no a\no b\no c\no d

you give up a full - time salary of $45,000 a year to go to school for 2 years. the total cost of going to school is $30,000. if you want to be able to recover your investment in 5 years or less, what is the minimum salary you would need to earn upon earning your degree?\na. $51,000\nb. $60,000\nc. $69,000\nd. $75,000\nplease select the best answer from the choices provided\no a\no b\no c\no d

Answer

Explanation:

Step1: Calculate total opportunity - cost and school cost

The opportunity - cost of giving up work for 2 years is $45000\times2 = 90000$ dollars. The cost of going to school is $30000$ dollars. So the total investment is $90000 + 30000=120000$ dollars.

Step2: Calculate the minimum annual salary

We want to recover this investment in 5 years. Let the minimum annual salary be $x$. We need to make up for the investment in 5 years. So we set up the equation $5x=120000 + 5\times45000$ (the $5\times45000$ is the salary we could have earned in those 5 years without going to school). First, simplify the right - hand side: $120000+225000 = 345000$. Then $x=\frac{345000}{5}=69000$ dollars.

Answer:

C. $69,000$