Question

Joaquin is offered vocational training that will cost $3,000 but will make him eligible for a promotion. Joaquin is trying to decide whether to get the training or put the money in savings for retirement. Which statement is true?
Joaquin should put the money in savings because retirement is expensive and he should have every penny he can.
Joaquin should put the money in savings because it will grow quickly with interest that he can use in retirement.
Joaquin should take the class because a promotion will mean a larger salary over the long term compared to a single cash advantage.
Joaquin should take the class because $3,000 is too small of an amount to bother putting away for retirement.

Answer 1

Joaquin should take the class because a promotion will mean a larger salary over the long term compared to a single cash advantage.

Reason: The $3,000 is an investment in human capital that can raise future earnings repeatedly (payback over many years). The other options either assume saving is always better, overstate how quickly $3,000 will grow in a savings account, or dismiss the amount as “too small,” none of which address the long-term increase in income from the promotion.