After finishing college, you are torn between two career paths: banking or becoming

a Finance Professor. If you choose to become a banker, you can start your job right

away with a yearly salary of $$50,000$ for the first two years. In year $3,$ your salary will

increase to $$60,000$ and will continue to grow by $5\%$ every year after that. However,

there is uncertainty in the banking profession, and you expect to work for $30$ years

before retiring. To evaluate the cash flows, you have decided to use a $10\%$ discount

rate.

On the other hand, if you choose to become a Finance Professor, you will need to

pursue graduate studies for six more years with an annual expense of $$20,000.$ You

will make six total payments, with the first payment due today. After completing your

studies, it will take you two more years to find a job as a Professor, starting with a

yearly salary of $$55,000,$ which will grow by $3\%$ each year. However, academia is less

uncertain, and you expect to work for $40$ years as a Professor. To evaluate the cash

flows, you have decided to use a $5\%$ discount rate.