Question

Studies have concluded that a college degree is a very good investment. Suppose that a college graduate earns about 7575​% more money per hour than a​ high-school graduate. If the lifetime earnings of a​ high-school graduate average ​$1 comma 200 comma 0001,200,000​, what is the expected value of earnings of a college​ graduate?

Answer 1

Answer:

expected value of earnings = $2100000

Explanation:

given data

rate of excess earning = 75%

lifetime earnings average = $1,200,000

to find out

expected value of earnings

solution

we get here expected value of earnings that is express as

expected value of earnings = lifetime earnings + ( rate of excess earning × lifetime earnings )   .................1

put here value we get

expected value of earnings = $1,200,000 + ( 75% × $1,200,000 )

expected value of earnings = $1,200,000 + $900000

expected value of earnings = $2100000