Sam Has Just Entered College, and He Is Considering Two

question 122

Essay

Sam has just entered college, and he is considering two options. He can get a part-time job after classes and during breaks to pay his college expenses or he can take out student loans and keep an active social life. While in school, his school loans due not accrue interest. If he doesn't work, he must borrow $10,000 per year for four years. If he works, he just does pay all his college expenses. If his appropriate discount rate is 10%, what is the present value of his school loan debt after 4 years?

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