Question

A survey estimates the current average cost of college to be $34,179.

(a) If the average cost of college increased by 7.4% each year, what will be the average cost of college 15 years from now?

(b) If a savings plan offers a rate of 5.4% compounded continuously, how much should be put in the plan now to pay for 1 year of college 15 years from now?

(Round to the nearest cent as needed)

Answer 1

the answer to part a is 72,114 this is because 7.4% of 34,179 is 2529 so 2529 multipled by 15 would give you 37,935 so now you must add 37,935 + 34,179 which would give you 72,114

part b) final balance is 76,115.22 and the compounded intrest is 4,001.22