Money needed at an interest cost


Nancy Geer is considering an MBA degree. She estimates that she will forgo after tax income of $9,600 a year (she will have a part time job), during the two years it will take her to complete the degree, but her expenses will be $3,600 a year less than if she were working. Tuition will be $10,000 at the beginning of each year. She estimates that her income will be $4,800 a year higher, after tax, for her 40-year working life if she receives the MBA. She can borrow the money needed at an interest cost of 8 percent, after tax. Would you reccommend that she pursue the MBA degree?

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Finance Basics: Money needed at an interest cost
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