Question 12 • SHS Alt Personal Finance - 2021
Include both college costs and the salary each person gives up while attending school. Person A’s investment is $45,000 + 3($18,000) = $99,000, and the annual salary increase after graduating is $33,000 − $18,000 = $15,000, so recovery takes $99,000 ÷ $15,000 = 6.6 years. Person B’s investment is $30,000 + 4($27,000) = $138,000, and the annual increase is $37,000 − $27,000 = $10,000, so recovery takes 13.8 years. Therefore, Person A recovers their investment in a shorter amount of time.
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