sure u want to go to college?

Question

twin boys (both 18 years old) inherit $100,000 each from a deceased uncle. the first twin uses the money to pay for a college degree and soon lands a job paying $70000/yr the other twin just gets a job paying $20000 per year. but invests the $100.000 at 10% annually in the stock market. assuming both brothers spend every sent they earn for the rest of their lives and nver acquire assets...... in his lifetime which brother has earned more money by the time they are 65 years old (neither brother ever gets a raise) ? and how much?

thanks lukeshanebaker, you are the only one so far to actually use numbers to answer this instead of emotion. I agree with your calculation of the second brothers income. however for the first student he would double his money approx every 7.5 years (see 'rule of 7.2' so after 15 years his 100000 investment would now be worth $400000. after 30 years it would be worth $1,600,000 and after 45 years it would be worth $6,400,400. A good free calculator for calculating interest on the web is at http://www.moneychimp.com/calculator/compound_interest_calculator.htm. Surely there is a mathmatician around here somewhere who can back up his arguments with numbers.

Answer 1

Your scenario is flawed. Spend every cent, never acquire assets, never get a raise. Therefore your conclusions will also be flawed.

Answer 2

Investing brother earns: $940,000

I used this equation: ((20000*(65-18))+((100000*0.1
^(65-18))

College going brother earns: $3,290,000

I used this equation: (70000*(65-18))

So the one who got an education earns $2,350,000 more. In conclusion stay in school!

Answer 3

That scenario is out there. Who the hell is going to stay in a job, especially someone who is college educated, where a raise is never received???

Answer 4

The one who invested their money

Answer 5

College is about more than just future earnings.

Answer 6

i`m in a university already...dude.