Question 2: Wharton or Rutgers MBA? See appendix articled

Given: You are 23 years old, you consider to choose a two year MBA program, then you plan to work for 40 years and then retire. You will borrow at Rate Z (specified below) the whole cost of the program at the MBA graduation date (at age 25) . You will make $125K per annum in all years of your working life if you graduate from Wharton MBA or $X per annum if you graduate from Rutgers MBA. Wharton has a total program cost of $140K; Rutgers has an in-state total program cost of $50K and an out-of-state total program cost of $85K Q 2.1 In the table below calculate which program is financially better for you if you live in NJ;

X Borrowing Rate Z Borrowing Rate Z Borrowing Rate Z 5% 10% 15% 115 100 90

Q 2.2 Now which program is financially better if you live outside of NJ

X Borrowing Rate Z Borrowing Rate Z Borrowing Rate Z 5% 10% 15% 115 100 90

Q 2.3 How would your answers change if the post-graduation annual real income in all cases would grow at 5% per annum? No need to recalculate the tables just indicate the direction of change [Actual numbers for 2014: Wharton (UPenn) has a higher average post-graduation salary: ($125,000 vs. $93,035); Rutgers has a lower in-state total program cost: ($52,305 vs. $141,740); and a lower out-of-state total program cost: ($86,301 vs. $141,740)]