Use the following to answer questions 1 and 2.
Your sister Mandy is in her final semester of school, getting ready to graduate with a Bachelor of Science degree in healthcare management. She has been working as a radiology tech for a local hospital earning $40,000 per year with guaranteed pay increases of $5,000 every five years. Your sister is considering returning to school to further her education. She has applied, and been accepted, into two different programs, and is trying to decide which option makes the most financial sense, given that she is planning to retire at the age of 65. Knowing that you have just finished taking a finance class, Mandy has turned to you for help making a decision.
The first option is a one year advanced radiology certificate program. After earning the certificate, she will automatically be eligible for a $10,000 increase in her annual salary (her salary will increase $5,000 every five years until she retires… that is, after completing the certificate she will receive a pay increase of $10,000 for a total of $50,000 per year. After another 5 years, her salary will increase to $55,000 per year. Five years later her salary will increase by another $5,000 and so on). Mandy will be completing the certificate outside of normal work hours, so she will not lose any income during this time. The total cost of the program is $5,000, due when she begins in the program.