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Susan is considering going to economics school. If she does, she will spend $60,000 on tuition and books to get a college education (during the 1st time period), $120,000 on tuition and books to get an economics degree (during the 2nd time period), and her economics degree will earn her $620,000 during the remainder of her work-life (during the 3rd time period). Susan's time preference for money is associated with a per-period interest rate of 20%. Approximately what is Susan's PV of obtaining this degree?

Microeconomics, Economics

  • Category:- Microeconomics
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