Based on the cost of college and the wages foregone, the number of years it will take for James to recover his investment is c. 10 years
The investment into the college degree is:
= Cost of tuition in two years + Salary in two years foregone
= (2 x 28,000) + (2 x 42,000)
= $140,000
The payoff from the investment is the difference between the money he was earning before the degree and what he earns after:
= 56,000 - 42,000
= $14,000
The time to recover is:
= Investment / Payoff
= 140,000 / 14,000
= 10 years
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