Timemaps Theme 2 Student Project

Name: ______

TimeMAPS™ Theme 2

Student Project – Determining the Return on Investment for Education

STUDENT PROJECT

Determining the Return on Investment for Education

Introduction

What is the correct amount of education one should complete (high school, technical training or college)? Everyone is unique and the answer for each individual can and should be different. Most experts contend that the time expended completing an education is an investment in one’s future. If this is true, then you should be able to measure the return on your investment just like you can with other types of investments.

For example, assume you spend 15,000 hours in school completing your education. After graduation, you get a job paying $20,000 per year. You can easily determine the return on your investment by dividing the money you are paid by the number of hours spent in school.

$1.33 = $20,000 ÷ 15,000

This happens to be $1.33 for every hour you spent in school, but what happens in the future? This project will allow you to estimate your return on investment the first year you work, the last year you work and cumulatively over your working years.

Objectives

· Realistically estimate how much of your life will be spent in school achieving the different levels of education.

· Estimate the return on investment for the first and last year as well as cumulatively over your working years at each of the different levels of education.

· Analyze your results to determine if there is connection between the level of education you achieve and the amount of income you will potentially earn during your lifetime.

Grading

The following rubric will be used to grade the final project.

Category / 20 Points / 17 Points / 14 Points / 10 Points
Ability to read and follow instructions / Student was able to read and follow all instructions extremely well / Student was able to read and follow most of the instructions / Student was able to read and follow some of the instructions / Student didn’t read or follow the instructions
Computer skills / Student was able to start the program and execute all of the instructions / Student was able to start the program and execute most of the instructions / Student was able to start the program and execute some of the instructions / Student was unable to start the program or execute the required instructions
Math / Student was able to perform and understand all the math required to complete the project / Student was able to perform and understand most of the math required to complete the project / Student was able to perform and understand some of the math required to complete the project / Student was unable to perform or understand the math required to complete the project
Logical reasoning / Student applied excellent logical reasoning skills / Student applied good logical reasoning skills / Student applied some logical reasoning skills, but was lacking in some important areas / Student applied poor or no logical reasoning skills
Writing skills and Communication Skills / The student was able to communicate all of their findings via their writing skills / The student was able to communicate most of their findings via their writing skills / The student was able to communicate some of their findings via their writing skills / The student was unable to communicate their findings via their writing skills
Total Points

Step 1 – Time in School

Use the Lesson 2.1 - “Time in School Exercise” to find out how much of your life will be spent in school. Determine how many hours of your life will be spent in school when you complete 10, 12, 14 and 16 years in school. The following table illustrates how the number of years spent in school correlates to one of the levels of education used within the software. Study the levels of education carefully because you will use them throughout the project.

Level of Education / Description / Years in School
Level 1 / Will not complete high school / 10
Level 2 / Will complete high school / 12
Level 3 / Will attend some college or technical training / 14
Level 4 / Will complete a bachelor’s degree or higher / 16

After the TimeMAPS software has been started, perform the following to start the “Time in School Exercise”.

· Click [Exercises] on the Application Menu

· Click on [2 – Basic Life Planning] to display the exercises for this theme

· Click on [Exercise 1 - Time in School] in Lesson 2.1 to start the exercise

Run the exercise multiple times to collect the information for the table below. Complete the table using the information from the output of the exercise. For each of the levels shown, adjust the inputs to match what is shown in the table and press [Calculate]. The output fields will be updated. Record the outputs in the table where appropriate.

Inputs / Parameter / Level 1 / Level 2 / Level 3 / Level 4 /
Age (yrs) / 15 / 15 / 15 / 15
Job Age (yrs) / 16 / 18 / 20 / 22
Years in School / 10 / 12 / 14 / 16
Months Per Year / 9 / 9 / 9 / 9
Days Per Week / 5 / 5 / 5 / 5
Hours Per Day / 6 / 6 / 6 / 6
Homework Hours Per Day / 1 / 1 / 1 / 1
Output / Hours Spent in School
Percent of Life in School

Close the exercise by clicking the [Close] button in the bottom right of the exercise form.

Step 2 – Life Simulator

You’re now ready to run the Life Simulator to collect income data for some jobs that require different levels of education (LOE). Start the simulator by clicking [Life Simulator], [Run Simulator] on the Application Menu. The simulator will open and you will be on the Personal Info Tab. Use the Personal Info and Getting a Job tabs to collect the information to complete the following table. For each job (1 – 4), collect the information from the Personal Info Tab and then go to the Getting a Job Tab to collect the remaining information. Simply repeat the process until you have collected all of the information necessary.

Tab/Note / Parameter / Job 1 / Job 2 / Job 3 / Job 4 /
Personal Info / Level of Education / Lv 1 / Lv 2 / Lv 3 / Lv 4
Year of Birth
Age
Job Age / 16 / 18 / 20 / 22
Job Year
Retire Age
Life Expectancy
Marital Status / Single / Single / Single / Single
Level of Education / Lv 1 / Lv 2 / Lv 3 / Lv 4
Getting a Job / State
Job Category / Food preparation and serving related occupations / Healthcare support occupations / Computer and mathematical occupations / Architecture and engineering occupations
Job Title / Food Preparation Workers / Nursing Aides, Orderlies, and Attendants / Computer Support Specialists / Electrical
Engineers
Job Age / Before Tax Income
Age 67 / Before Tax Income
Total BTI ($)

Step 2 Notes:

1. The Job Age - Before Tax Income is shown on the Getting a Job Tab after a job title has been selected

2. The Age 67 - Before Tax Income or BTI ($) and Total BTI ($) Income can be found on the Timeline Report of the Getting a Job Tab. To get to the report perform the following:

· Click the [Timeline] button at the bottom of the tab. [NOTE: You will have to set your 401(k) contributions before the Timeline becomes available.]

· Click the [Reports] button at the bottom of the timeline

· Read the values from the Tabulated 401(k) Data table

· Remember, most reports contain multiple pages. Navigate to the various pages using the buttons at the top left of the report window (Example Page: 1/4, 2/4, etc.).

Step 3 – Calculate the return on investment

The return on investment estimates how much money you will receive for each hour that was spent in school. It is calculated by dividing the Before Tax Income by the number of hours spent in school. For example, if the Before Tax Income or BTI ($) for the first year you started working was $21,000 and you spent 14,000 hours in school, the return on investment would be $1.50 per hour spent in school. Age 67 and Total BTI ($) are calculated the same way.

EXAMPLE: $1.50 = $21,000 ÷ 14,000

Level of Education / Job / Hours in School / First Year
Job Age / Age 67 / Total BTI /
1 / Food Preparation Worker / $ / $ / $
2 / Nursing Aide / $ / $ / $
3 / Computer Support Specialist / $ / $ / $
4 / Electrical Engineer / $ / $ / $

Step 4 – Graph the results

Using the information from the table above in Step 3, graph the return on investment for the three collection times (Job Age, Age 67 and Total BTI) below. The horizontal scale and legend are already placed on the graphs, but you will need to add the vertical scale and then graph the individual points. Connect the points using a straight line for each graph.

Return on Investment – Job Age

Return on Investment – Age 67

Return on Investment – Total BTI ($)

Step 5 – Present your findings

Now that you have completed the data collection and analysis, it is time to present your findings. Answer the following questions. If more space is needed, you may continue on a separate sheet of paper, but make sure all pages are attached when you turn in your project.

1. Explain the connection between the level of education you achieve and the amount of income you will earn during your lifetime? Remember to use the collected data and your analysis to support your answer.

2. How do you explain the small difference between the return on investment for Level 1 and Level 2 data?

3. How did this project help to determine the Level of Education (LOE) appropriate for you?

4. What would you say to an individual who asked you what is the importance of getting an education?

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