Suppose that the social cost is $200 per person for every 5 years to support students going to school. Also suppose that the social benefit is $500 per person for every 5 years. We still assume the 5- year discount rate is 25%. Compute the cost and the benefit of going to school, taking into account both private and social factors. Comparing the present values of cost and benefit, is it worth going to school? 

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Age 15 20 25 30 35 40 45 50 55 60 65 (1) direct cost of going to school 150 350 0 0 0 0 0 0 0 0 0 (2) Earnings, not going to school 1200 1300 1500 1600 1800 2000 2200 2500 2700 3000 3100 (3) Earnings, going to school 0 0 2200 2400 2700 3000 3100 3500 3700 4000 4100 Age 15 20 25 30 35 40 45 50 55 60 65 (1) direct cost of going to school 150 350 0 0 0 0 0 0 0 0 0 (2) Earnings, not going to school 1200 1300 1500 1600 1800 2000 2200 2500 2700 3000 3100 (3) Earnings, going to school 0 0 2200 2400 2700 3000 3100 3500 3700 4000 4100

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To determine whether it is worth going to school we need to compare the present value of the cost an... View the full answer