A college education costs approximately $75,000 at an Ivy League school, inflation averages 5%, what factor will you use to determine the cost of an education in 15 years?
A) 2.0789
B) 2.7890
C) 2.9500
D) 0.4810

Question

Quizplus · Accepted Answer

The cost of education in the future can be calculated using the formula for compound interest: Future Value = Present Value * (1 + rate)^number of periods. Here, the rate is 5% or 0.05, and the number of periods is 15 years. So, the factor is (1 + 0.05)^15 = 2.0789.

A College Education Costs Approximately $75,000 at an Ivy League