Question 1131682: Mr. and Mrs. Pedigo want their new grandchild to attend the college where they met, so they want to invest in a college fund. To determine the amount to invest, they would like an estimate of the costs when their grandchild enrolls in 17 years. They know that current tuition, fees, and room and board amount to $20,871 per year and have been increasing at 5.2% per year. Assuming that the costs continue to rise at the same rate, help the Pedigos by finding the annual costs in 17 years. (Round your final answer to two decimal places.)
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! current costs are 20,871 per year.
17 years from now, those costs will be 20,871 * 1.052 ^ 17 = 49,409.54
the formula used is f = p * (1 + r) ^ n
f is the future value
p is the present value
r is he interest rate per year
n is the number of years
they will continue to increase 5.2% more each year after that
year 17 = 49,409.54
year 18 = 51,978.84
year 29 = 54,681.74
year 20 = 57,525.19
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