Question

Suppose the cost of college tuition is expected to increase 5% every year. How much will the tuition at a comunity college cost in 5 years if it currently costs $5,952 per year?

Answer 1

College tuition fees after fifth year = $7596.42

Explanation:

Cost of tuition at present = $5952

Percentage increase in first year = 5%

College tuition fees after first year = 5952+ 5% of 5952 = $6249.6

Percentage increase in second year = 5%

College tuition fees after second year = 6249.6+ 5% of 6249.6 = $6562.08

Percentage increase in third year = 5%

College tuition fees after third year = 6562.08+ 5% of 6562.08= $6890.184

Percentage increase in fourth year = 5%

College tuition fees after fourth year =6890.184+5% of 6890.184=$7234.69

Percentage increase in fifth year = 5%

College tuition fees after fifth year =7234.69+5% of 7234.69 = $7596.42

Answer 2

$7,596.43

Explanation:

The cost of the college tuition is increasing 5% compounded annually for 5 years.

∴ A = P(1 + r%)ⁿ

where A = tuition fee after 5 years.

P = current tuition

r = rate of increase

n = period

A = $5,952(1 + 5%)⁵

= $5,952(1 + 0.05)⁵

= $5,952 × 1.05⁵

= $7,596.43

=