Case scenario:
Sharon Shay estimates that a college education has a $28,000 equivalent cost at graduation. She believes the benefits of her education will occur throughout forty years of employment. She thinks she will have a $3000-per-year higher income during the first ten years out of college, compared to a non-college graduate. During the subsequent ten years, she projects an annual income that is $6000-per-year higher. During the last 20 years of employment, she estimates an annual salary that is 12,000 above he level of the non-college graduate. Assuming her estimates are correct, what rate of return will she receive as a result of her investment in a college education?
PW = 3000(P/F,i,10) + 6000(P/F),i,10) + 12000(P/F,i,20) = 28000
0 = -28000 + 3000(P/F,i,10) + 6000(P/F,i,10) + 12000(P/F,i,20)
I am not sure I should be using P/F or some other factor.