Question

(TCO A) Upon graduating from college this year you expect to earn $25,000 per year. If you get your MBA, in one year you can expect to start at $35,000 per year. Over the year, inflation is expected to be 5%. In today’s dollars, how much additional (less) money will you make from getting your MBA (to the nearest dollar) in your first year? Group of answer choices -$2,462 $8,333 $8,750 $9,524 $10,000

Answer 1

Answer:

$8,333

Explanation:

To calculate the additional money that I will make in today's dollars from getting the MBA in my first year, I have to consider that the statement indicates that in one year I can start at $35,000 with the MBA and that the inflation is expected to be 5%. This means that I have to subtract 5% from $35,000 and then, calculate the difference with the salary I will earn upon graduating from college:

$35,000/1,05= $33,000

$33,000-$25,000= $8,333