Finance Problem
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Sharon Shay estimates that a college education has a $28,000 equivalent cost at graduation. She believes the benefits of her education will occur throughout forty years of employment. She thinks she will have a $3000-per-year higher income during the first ten years out of college, compared to a non-college graduate. During the subsequent ten years, she projects an annual income that is $6000-per-year higher. During the last 20 years of employment, she estimates an annual salary that is 12,000 above he level of the non-college graduate. Assuming her estimates are correct, what rate of return will she receive as a result of her investment in a college education?
I am trying to use the factor method. Here is what I started with, but I am not sure if this is correct.
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- MS, University of Wisconsin-Madison
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