About this video
This video compares the annual salaries of a nurse practitioner ($100,000, master's degree) and an accountant ($80,000, bachelor's degree). The yearly difference is $20,000, and assuming salaries stay fixed, that adds up to $500,000 over a 25-year career. It also reviews how many years of school bachelor's and master's degrees usually take.
You'll be able to
- find the difference between two annual salaries.
- multiply a yearly difference to find the total over a career.
- explain why assuming salaries stay fixed is a simplification.
Key words
- Annual salary
- The amount of money a person earns from their job in one year.
- Bachelor's degree
- A college degree that usually takes about four years after grade 12.
- Master's degree
- A degree that usually takes about two more years after a bachelor's degree.
- Career
- The many years a person spends working in a job or field.
Transcript
- [Instructor] So in this table here, we're given different occupations, the amount of education you need for these different occupations, and the annual salary. And then we're asked a question, how much more does a nurse practitioner make compared to an accountant over a 25-year career?
So I encourage you to pause this video and think about that, and then we'll do this together. All right, now let's do this together. And these obviously aren't going to be exact numbers and it might depend on where folks live and the demand for different things, but let's just try to answer this question first.
So if we look at nurse practitioner, over here in this table says, that a nurse practitioner makes a $100,000 a year and an accountant here, and once again, there's different accountants at different levels working for different firms, but at least according to this one, an accountant with a bachelor's degree, this was a nurse practitioner with a master's degree, an accountant with a bachelor's degree makes $80,000.
So per year, it looks like there is, if we look at the difference between these two, it looks like there is a +$20,000 difference for being the nurse practitioner with a master's degree versus the accountant with the bachelor's degree. And just as a little bit of a refresher, if you're wondering about bachelor's degrees and master's degrees, if we think about the school system, you have kindergarten, then you have 12 more years of grades 1 through 12, so that would be 12 years.
Then you typically, if you're thinking about things like bachelor's degrees and master's degrees, you would have four years to get a bachelor's. And that might be a bachelor of science, a bachelor of arts, so bachelor's degree. And it's typically, after that, you're looking at another two years for a master's degree.
There's some programs that might be one year, there might be some programs that might be three years. So that just gives you a sense of the nurse practitioner probably had to spend two more years total in their education. But let's go back to the question. The nurse practitioner's making $20,000 more per year.
Over a 25-year career, and we're gonna have to make some assumptions here, because typically over a 25-year career, you're going to have, you're going to see people's salaries increase because they might get promoted, the market might change, there's probably inflation, so people are going to be making more.
But if we just were to assume that their salaries do not change, which is very unlikely, but if we were to assume that over 25 years, we would just take this difference times 25. And so what's that going to be? Let's see, 2 x 25 is 50, but this is 20,000 x 25.
So I'm gonna have to put four more zeros here, 1, 2, 3, 4. And so this is $500,000 over this 25-year career. And this is assuming these salaries stay fixed, which is unlikely, but let's just go with it.
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