Question

Future value. Uphtate Univerity charges $17,000 a year in gaduate tuiton. Tution rates are growing at 3.25% each year. You plan to enroll in graduate sehool in sie years. What is your expecte graduate fuition in six years? What is your expocied graduate tulson in sic years? (Risund to the nearest cent)

Answer 1

To calculate the expected graduate tuition in six years, we need to calculate the future value of the current tuition. The current tuition is $17,000 and it grows at a rate of 3.25% per year. The expected graduate tuition in six years is approximately $19,743.56.

Step-by-step explanation:

To calculate the expected graduate tuition in six years, we need to calculate the future value of the current tuition. The current tuition is $17,000 and it grows at a rate of 3.25% per year. Using the formula for future value of a constant growth annuity, we have:

Future value = $17,000 * (1 + 0.0325)^6 = $19,743.56

So, the expected graduate tuition in six years is approximately $19,743.56.

Answer 2

To determine the future value of graduate tuition at Upstate University, which currently costs $17,000 and increases by 3.25% annually, the formula FV=PV(1+r)^n is used. After 6 years, the expected tuition is $20,413.01.

Step-by-step explanation:

The question asks for the calculation of the future value of graduate tuition at Upstate University, taking into account an annual inflation rate. To calculate this, we will use the formula for compound interest:

FV = PV ( 1 + r )^n

Where:

After plugging these values into the formula, we get:

FV = $17,000 ( 1 + 0.0325 )^6

Calculating the above expression gives us the expected future value of graduate tuition in six years.

To provide an accurate answer to the student's question, we perform the calculation:

FV = $17,000 ( 1 + 0.0325 )^6 = $20,413.01

Therefore, the expected graduate tuition in six years, rounded to the nearest cent, is $20,413.01.