You have an absolutely brilliant child who is six years old and will be attending a private college in twelve years.You know that a four year college now costs at least $30,000 per year,including tuition,books,room,and board.The cost of sending a child to college has increased by 7 percent per year,and you believe this will be true for the next twelve years.How much will the annual tuition be when your child is eighteen?
A)2)2522
B)2)2107
C)2)0122
D)1)5007

Question

Quizplus · Accepted Answer

To find the tuition cost in twelve years, we need to calculate the future value of $30,000 with an annual increase of 7% for twelve years. We can use the formula:

FV = PV * (1 + r)^n

Where:
PV = present value = $30,000
r = annual interest rate = 7% or 0.07
n = number of years = 12

FV = $30,000 * (1 + 0.07)^12
FV = $30,000 * 2.522
FV = $75,660

Therefore, the annual tuition cost when your child is eighteen will be $75,660 / 4 = $18,915. This is closest to option A) 2522.

You Have an Absolutely Brilliant Child Who Is Six Years