Studies have concluded that a college degree is a very good

Studies have concluded that a college degree is a very good investment. Suppose that a college graduate earns about 78% more money per hour than a high- school graduate. If the lifetime earnings of a high-school graduate average $1200,000, what is the expected value of earning a college degree?

Solution

78% more per hour.
Assuming the same number of hours worked for both will mean 78% more lifetime

College earnings will be 1,200,000 + 78%(1,200,000)
= $2,136,000

The value of the degree is
2,136,000 1,200, 000
= $936.000