Future value. Upstate University charges $16,000 a year in graduate tuition. Tuition rates are growing at...

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Future value. Upstate University charges $16,000 a year in graduate tuition. Tuition rates are growing at...

Future value. Upstate University charges $16,000 a year in graduate tuition. Tuition rates are growing at 2.75% each year. Your plan to enroll in graduate school in four years. What is your expected graduate tuition in four years?

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Answer 1

Answer #1

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
Hence

A=$16000*(1.0275)^4

=$16000*1.114621259

=$17833.94(Approx).

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Answer 2

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