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In recent past, college fees had been increasing at about 8 percent per year. because...

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user1007675 | eNotes Newbie

Posted July 3, 2013 at 9:28 PM via web

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In recent past, college fees had been increasing at about 8 percent per year. because this rate of increase exceeded the general inflation rate, Paula and Nancy felt it would decline to a level close to measures of general inflation, such as the Consumer Price Index. Thus they decided to assume that college fees would increase 6 percent per year. At this rate, how much will one year of college cost 18 years from this fall. Right now the cost of college for one year is $14,000.

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justaguide | College Teacher | (Level 2) Distinguished Educator

Posted July 4, 2013 at 6:01 AM (Answer #1)

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The rate at which the cost of college education increases is assumed to be 6% per year. The cost of education right now is $14000.

The cost of education after 18 years would be 14000*(1+0.06)^18 = 39960.75

The cost of education after 18 years would be $39960.75

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