Question

The total estimated cost of attending a public two-year college in Hasani’s home town last year was $2,265. The cost of attending the college is expected to increase 5% annually. Hasani plans to enter the college this year and attend for 2 years. Which is the best estimate for the total cost Hasani will pay for only his second year?

Answer 1

$2,497.16

D

Step-by-step explanation:

Answer 2

The future worth of a current amount that has a compound interest can be calculated through the equation,

F = P x (1 + r)^n

Where P is the present worth, F is the future worth, r is the rate and n is the number of years. Substituting the known values to the equation,

F = ($2,265)(1 + 0.05)^2 = $2,497.163

Thus, the amount that Hasani will pay for his second year is approximately $2,497.163.