Question

Callie is comparing the costs of two options for her college education.

Option A: Complete the first two years of schooling at a community college and then transfer to a university.
Option B: Complete all four years of schooling at the university.
Community College Financial Analysis
Costs per Year
Financial Aid Package per Year
Tuition & Fees
Scholarships & Grants
$2,900
$800
Room & Board

$1,250


University Financial Analysis
Costs per Year
Financial Aid Package per Year
Tuition & Fees
Scholarships & Grants
$9,500
$10,000
Room & Board
Work-Study
$11,500
$2,000

Which statement about the cost of the options is true?
She would save $1,000 by choosing option B.
She would save $5,650 by choosing option A.
She would save $11,200 by choosing option B.
She would save $11,300 by choosing option A.

Answer 1

Answer: She would save $11,300 by choosing option A

Explanation:

Community College Financial Analysis:

Tuition and fees = 2900

Scholarship and grant = 800

Rooms and board = 1250

University Financial Analysis:

Tuition and fees = 9500

Scholarship and grant = 10000

Rooms and board = 11500

Work study - 2000

Option A :

First two years at college :2 × (2900 + 1250 - 800)

2 × (3350) = $6700

2 years at university : 2 × (9500 +11500 - 2000 - 10000)

2 × 9000 = 18000

Option A total = $(18,000 + 6700) = $24,700

Option B :

4 years at university : 4 × (9500 +11500 - 2000 - 10000)

4 × 9000 = $ 36000

She would be saving $(36,000 - 24,700) = $11,300 by choosing option A

Answer 2

Callie's comparison of two options for college education

The true statement is:

She would save $11,300 by choosing option A.

Explanation:

Cost Analyses:

Option A: Community College + University Total Expenses

Tuition & Fees $5,800 ($2,900 x 2) + $19,000 ($9,500 x 2) = $24,800

Scholarships ($1,600) ($800 x 2) + ($20,000) ($10,000 x 2)=($21,600)

Room & Board $2,500 ($1,250 x 2) + $23,000 ($11,500 x 2) = $25,500

Work-Study + ($4,000) ($2,000 x 2) = ($4,000)

Total Cost $6,700 + $18,000 = $24,700

Option B: 4 years' University

Tuition & Fees $38,000 ($9,500 x 4)

Scholarships ($40,000) ($10,000 x 4)

Room & Board $46,000 ($11,500 x 4)

Work-Study ($8,000) ($2,000 x 4)

Total Cost $36,000

Difference between the two options = $11,300 ($36,000 - $24,700