Question

Alistar has an annual income of $25,000. He decides to take classes on line and at night so that he can continue to work. After 3 years he gets his degree and immediately starts earning $32,000 per year. If it takes Alistar 6 years to recover his investment for his education, how much did it cost him?
a.
$21,000
b.
$42,000
c.
$63,000
d.
$150,000


Please select the best answer from the choices provided

A
B
C
D

Answer 1

Answer: B ($42,000).

Reason: His pay increases from $25,000 to $32,000, a gain of $7,000 per year. In 6 years that gain totals 7,000 × 6 = $42,000, which is the cost of his education.