Return on Investment for a Master's Program

Calculating the cost of your Master's Program

Actual Investment
Cost of the entire program 3,500,000
Living expenses 400,000 things such as rent, food, mobile etc
Miscellaneous expenses 100,000 eveything else - partying, going back home etc

Total cost of the program 4,000,000

Opportunity Cost
Duration of the Program? 1 years
Are you a student or working? Working
1,800,000
How much is your current CTC?
Assumed Annual Increment 10%
Total Opportunity Cost 1,800,000

Cost of Financing
Loan amount 1
Rate of Interest 8%
Tenure - years
Total Interest Paid - over the loan period

Total cost of your Masters 5,800,000

Calculating the return of your Master's Program

Expected salary after Masters 2,200,000 per year

Expected increment / year 10%

Metric 1
How much of the fees is recovered in 2 years?
116%
If this number is greater than 100%, then that is a good sign.
Lower the number, lower is the short term financial impact of your Masters Program

Metric 2
Over a 10-year period, how many times is your
income above the TOTAL cost of your masters
6.0
Which means your Master's Program has delivered
a rate of return on your money of
20% over a 10 years period
As a comparison
Gold gives ~10% return on investment
Equities give ~15-20% return on investment
Current Salary 1800000 5% MBA Fees per year 1200000
After - Mba Base 1800000 10%
After - Mba Bonus 400000
Expected Return 12% 16 16
0 0 3000000 0 3517735.9347711
1 0 3090000 0 3587394.0720933
2 2200000 1984500 2528843.26912277 2281131.5761701
3 1980000 2083725 2253424.69525791 2371473.4207709
4 2178000 2187911.25 2454224.91562743 2465393.1602073
5 2395800 2297306.8125 2672918.22494077 2563032.4932849
6 2635380 2412172.153125 2911099.05686618 2664538.7306427
7 2898918 2532780.76078125 3170503.9233196 2770065.0170048
8 3188809.8 2659419.79882031 3453024.07490254 2879770.5622327
9 3507690.78 2792390.78876133 3760719.28949781 2993820.881529
10 3858459.858 2932010.3281994 4095832.88955208 3112388.0451539
11 4244305.8438 3078610.84460937 4460808.09753196 3235650.9380313
12 4668736.42818 3232541.38683983 4858305.84879719 3363795.5296365
13 5135610.07099801 3394168.45618183 5291224.19175932 3497015.1545726
14 5649171.07809781 3563876.87899092 5762719.41676757 3635510.8042586
15 6214088.18590759 3742070.72294046 6276229.06776666 3779491.4301699
16 6835497.00449835 3929174.25908749 6835497.00449835 3929174.2590875
benefit/loss of mba

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607722.96107474
2734931.57358368
5231669.21118048
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