You're deciding whether to pursue a Master's degree in Economics. With your Bachelor's degree, you'll earn $105,800 per year, but with a Master's degree, you'd earn $134,000 annually. The upfront cost of acquiring a Master's degree is $35,000 in tuition. The real interest rate is 2%. What is the next thing you should do to evaluate your decision? Compare the present value of benefits to the future value of costs. Determine the depreciation rate of your degree. Adjust the real interest rate to lower your opportunity cost. Use the nominal interest rate instead for a more accurate calculation.
You're deciding whether to pursue a Master's degree in Economics. With your Bachelor's degree, you'll earn $105,800 per year, but with a Master's degree, you'd earn $134,000 annually. The upfront cost of acquiring a Master's degree is $35,000 in tuition. The real interest rate is 2%. What is the next thing you should do to evaluate your decision? Compare the present value of benefits to the future value of costs. Determine the depreciation rate of your degree. Adjust the real interest rate to lower your opportunity cost. Use the nominal interest rate instead for a more accurate calculation.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Explain all option compulsory ......you will not explain all option then I will give you down upvote...

Transcribed Image Text:You're deciding whether to pursue a Master's degree in Economics. With your Bachelor's degree, you'll earn $105,800 per year, but with
a Master's degree, you'd earn $134,000 annually. The upfront cost of acquiring a Master's degree is $35,000 in tuition. The real interest
rate is 2%. What is the next thing you should do to evaluate your decision?
Compare the present value of benefits to the future value of costs.
Determine the depreciation rate of your degree.
Adjust the real interest rate to lower your opportunity cost.
Use the nominal interest rate instead for a more accurate calculation.
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