Suppose that the average earnings for high school graduates is $25,000, the tuition, fees, and books for typical
year of college total $10,000 and that a college degree takes 5 years.
a) How large must the present value of the increment to earnings from getting a college degree be to make this
investment show a positive return?
b) How much must the present value of the increment to earnings be for this investment to show a return of
10%?
1 answer