Calculate the present value of the salary

1. Calculate the present value of the salary differential for completing the certification program. Subtract the cost of the program to get the net value of undertaking the certification program.

2. Calculate the present value of the salary differential for completing the MBA degree. Calculate the present value of the cost of the MBA program. Based on your calculations, determine the net value of undertaking the MBA.

You are thinking of building a new machine that will save you $1000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 2% per year forever. What is the present value of the savings if the interest rate is 5% per year?

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