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a. If one year of college costs 12500 now and costs are increasing at a rate of 4% per year, how much will one

year of college cost in 18 years?

b. If college costs continue to increase at 4% per year, and Anna's college savings are invested in an account that pays 7% interest, how much money will she need to have available at age 18 to pay for all four years of her undergraduate education?

Top Answer

a: 25322.71 Using the formula Future value = Present value*(1+rate)^n = 12500*(1+4%)^18 =25322.71... View the full answer

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