If interest rate is 30% which profession should he choose

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Laurence has decided that he will definitely go to university rather than go into the workforce directly after high school. He is trying to decide between Law and Economics. Like Georgina, his life can be divided into three parts. He will incur education costs in the first period and earn in the remaining two periods. His income profile is given in the table below. (Discounting need not be applied to the first number, but the following numbers must be discounted back one period and two periods respectively.)

(a) If the interest rate is 2%, which profession should he choose?

(b) If the interest rate is 30% which profession should he choose?

Reference no: EM131072237

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