The Present Value of an Education Can Be Computed By:​

question 26

Multiple Choice

The present value of an education can be computed by:​

• A)summing the total expense on education and dividing it by the number of years spent in education.
• B)discounting earnings based on the level of education and then summing total earnings over work life.
• C)discounting the cost of education at the prevailing market rate of interest.
• D)summing the total earnings of an individual and dividing it by the number of years spent in education.
• E)dividing the total expense on education by the total earnings from a typical work life.

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Definitions:

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Invest

The process of distributing funds with the aim of earning revenue or gains.

Lump Sum

A single complete payment made at one time, as opposed to a series of payments made over time.

Interest

The cost of borrowing money or the return on investment, calculated as a percentage of the principal amount.