What is his return on investment after one year of the job?

Question

An MBA aspirant leaves his job where he had an annual salary of $14000$ and took admission in a one-year course in a top MBA institute having fees $36000$. At the end of the course, he lands up with another job where salary is $68000$.
a) $2.5\%$
b) $6.25\%$
c) $12\%$
d) $36\%$

I tried $((\text{total profit})/(\text{investment cost}))*100=((68000-28000-36000)/(36000))*100=11.11\%$.

Am I missing something?

Answer 1

If he never went for an education, he would have an annual salary of 14 (thousand) for two years, resulting in $2 \cdot 14 = 28$ thousand.

Now that he did, the first year earned him $-36$ and the second $68$ so his total income in the second scenario is $68-36 = 32$ thousand.

Can you finish this now? (remember the profit of $32-28=4$ is over two years)

Answer 2

Note that the cost incurs while out of work in the first year, which amounts to $50,000. Thus, the return on investment is 36%.

He is back to work the second year and there is no salary loss.