Calculation Methodology

The model simulates your financial state for the duration of your study period. During this time, it is assumed you earn zero salary and rely on your pre-MBA investments.

• Staggered Loan Accrual: To accurately reflect real-world B-school disbursements, the model assumes the loan is taken in equal annual tranches at the start of each academic year. Simple interest is accrued on these individual tranches until graduation.
  Graduation Balance = Σ [Tranche × (1 + Rate × Years Remaining)]
• Living Expenses: Monthly expenses are deducted directly from your existing investment corpus (Stocks, Cash).
• Corpus Compounding: Your remaining investments continue to compound monthly at your expected MF Return rate.

Starting from month 1 post-graduation, the model runs a monthly cashflow simulation incorporating salary, expenses, loan EMIs, and investments.

• Income Growth: Your starting CTC is converted to a monthly in-hand salary. On each anniversary of your graduation, your salary grows strictly by your specified Salary Growth %.
• Lifestyle Inflation: Your base expenses grow annually by your specified Expense Growth %.
• Loan EMI: The standard amortizing loan formula is used to calculate your flat monthly EMI based on the remaining balance at graduation and your repayment tenure.
• Savings & Investments: The golden rule of this model is that 100% of your net monthly savings are invested directly into the market.
  Monthly Savings = (In-hand Salary) - (Monthly Expenses) - (EMI)
  If savings are negative, your corpus is drained to cover the deficit. If positive, they are added to the corpus which compounds monthly at your MF Return rate.

To calculate the true Return on Investment, the engine runs a hidden parallel simulation simulating your life if you did not do the MBA.

• The Status Quo: It takes your "Current Job" inputs and compounds them forward for 13 years, applying your current salary growth and your standard expense growth.
• The Intersection: The "Break-Even Year" is calculated as the exact month where your MBA Net Worth curve physically crosses and beats your Baseline Net Worth curve. This accounts for the 2 years of lost wages and lost promotions.

• Net Worth: Defined simply as (Total Investment Corpus) - (Outstanding Loan Balance) at any given month.
• Break-Even Year: The exact year when your post-MBA Net Worth permanently surpasses what your wealth would have been if you simply stayed at your current job.
• 10-Year Corpus: Your total liquid mutual fund/investment balance exactly 10 years after you graduate.