Question

Assume that your university increase tuition only at the rate of inflation. how much will a $23,000-per-year college cost 15 years from now if inflation is at an annual rate of 8.0%

Answer 1

In economics, there is a formula to predict the growth of money value with time. When dealing with simple interest, the formula is

F = P(1+in), where F is the future worth, P is the present worth, i is the annual interest rate, and n is the amount of time, commonly in terms of years. Substituting to the formula,

F = $23,000(1+0.08*15)
F = $50,600