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Suppose you have finished your BA and are considering getting a Master's. Suppose also that we can divide the rest of your life into 3
Suppose you have finished your BA and are considering getting a Master's. Suppose also that we can divide the rest of your life into 3 periods and the per period interest rate is 5%. If you do not get the Master's, your wages starting in the current period (period 0) are going to be $50,000, $60,000, and $65,000, respectively, in the 3 periods of your life. If you end up getting the Master's, in period 0 you will need to pay tuition worth $30,000 and earn nothing, but in the two remaining periods, you'll earn $100,000, and $120,000, respectively.
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