Question

NEWS WIRE: PRICE EFFECTS College Costs Keep Rising The price of attending college has gone up again. According to the nonprofit College Board, in-state tuition at four-year public colleges rose to $10,560 this year, up another $120 from last year. Tuition at private colleges is up to nearly $38,000 a year, a hike of 2.1 percent. Over the last 10 years, college tuition has increased by 4.5 percent a year, while average consumer prices have risen by only 1.3 percent a year. These tuition hikes are making college attendance increasingly expensive and difficult for many families. Source: The College Board, October 26, 2020, www.collegeboard.org. According to the News Wire, during the past 10 years, by what percentage did Instructions: Round your responses to one decimal place. the nominal price of college tuition increase per year? % the real price of college tuition increase per year? %

Answer 1

The nominal price of college tuition has increased by an average of 4.5 percent per year, while the real price increase, after accounting for inflation, is 3.2 percent per year.

Step-by-step explanation:

According to the information provided by the News Wire, college tuition has increased by an average of 4.5 percent per year over the last 10 years. To calculate the real price increase of college tuition, we need to consider the rate of inflation, which is represented by the average consumer price increase of 1.3 percent per year during the same period. The real price increase can be found by subtracting the average consumer price increase from the college tuition increase:
Real price increase of college tuition per year = Nominal increase - Inflation rate
= 4.5% - 1.3%
= 3.2 percent.