Personal Finance Semester Exam
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Question
John is a high school senior and wants to attend college upon graduating. He aspires to be a computer systems salesman after college. He will not need a graduate degree. He expects to make $60,000 a year once he starts working. He has the option of going to the public in-state university for $10,000 a year and commute from home, or he can go to a private university and live on campus for $35,000 total each year. If he goes to the public university, he will need to get a used car for about $2,000 and can maintain his part time job. If he goes to the private university, he estimates he will need about $250/month for spending allowance. Between his parents and his own savings, he has $5,000 to put towards school and expenses the first year, and then $3,000 for each successive year. What is the best option financially?(1 point)
Responses
John should not bother going to college, because he can probably sell computers at Best Buy without a degree.
John should not bother going to college, because he can probably sell computers at Best Buy without a degree.
John should join the military, and when he's done, he can go to college with aid from the government.
John should join the military, and when he's done, he can go to college with aid from the government.
John should go to the public university, live at home and get a used car. He can maintain his part-time job and keep his expenses low. He will need to borrow about $26,000 over the entire 4 years, but with his expected income and growth, he will be able to pay that off in about 5 years with a monthly payment of about $450.
John should go to the public university, live at home and get a used car. He can maintain his part-time job and keep his expenses low. He will need to borrow about $26,000 over the entire 4 years, but with his expected income and growth, he will be able to pay that off in about 5 years with a monthly payment of about $450.
John should go to the private university. Although he will be heavily in debt ($126,000) by the time he is done, he will have a degree from a prestigious university, which might create opportunities for him.