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Bill wants to attend a college with a current tuition of $10,000 a year. He will graduate from high school in five years. Roughly how much will Bill need to save for one-year's tuition to account for an
annual rate of inflation of 3%?
$638.30
O $667.50
O $656.50
O $633.30

Respuesta :

Bill need to save $11,592 for one-year's tuition to account for an annual rate of inflation of 3%.

The option is not listed above.

To compute for future Value the formula is given below;

FV = Present value(PV) × (1 + rate of interest)^time period

pv= $10,000

rate of interest= 3% = 3/100 = 0.03

time = 5years

FV= $10000× (1+0.03) ^5

FV= 10000× 1.1592

FV= $11,592.7

Therefore, Bill need to save $11,592 for one-year's tuition to account for an

annual rate of inflation of 3%.

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