Question

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?
a.
$51,000
b.
$60,000
c.
$69,000
d.
$75,000


Please select the best answer from the choices provided

A
B
C
D

Answers

GPT-4o mini
To determine the minimum salary you would need to earn upon graduating in order to recover your investment of $30,000 for school and $90,000 (2 years of $45,000 salary) in lost wages in 5 years or less, we can follow these steps:

1. **Calculate the total investment**:
- Lost wages: $45,000 * 2 = $90,000
- Cost of school: $30,000
- Total investment = $90,000 + $30,000 = $120,000

2. **Calculate the amount you need to earn per year to recover this investment in 5 years**:
- Total amount to be recovered in 5 years = $120,000
- Annual amount needed = $120,000 / 5 = $24,000 per year

3. **Add the lost salary back to the annual earnings required**:
- You also want to cover your original salary of $45,000 when you start working again:
- Minimum salary needed = $45,000 + $24,000 = $69,000

Thus, the minimum salary you would need to earn upon earning your degree to recover your investment in 5 years or less is **$69,000**.

So the answer is **C. $69,000**.

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