Arthur is 10 years old. Tuition for one year at a public two-year college is $3,125. In 8 years, tuition is expected to increase
32%. Arthur’s family plans to save for his college costs for 5 years. If the family saves $75 per month, will there be enough money to pay for the expected cost of one year at the college when he is 18? A.No, they would need to save about $30 more per month to have enough money.
B.No, they would need to save about $15 more per month to have enough money.
C.Yes, they could save about $5 less per month and still have enough money.
D.Yes, they could save about $30 less per month and still have enough money.
Cost of college fee for one year in 8 years' time: $3125 + 32% of $3125 =$3125 x 132/100 = $4125
If they save $75/month for 5 years: 75 x 12 x 5 = 4500 4500 > 4125 So, they will have enough money. This leaves option C and D since A and B are wrong.
Why C is correct and D is wrong:
If they followed D: 75 - 30 = 45 45 x 12 x 5 = 2700 2700 < 4125 So, it won't be enough if they save about $30 a month
If they followed C: 75 - 5 = 70 70 x 12 x 5 = 4200 4200 > 4125 So, it will still be enough if they save $5 a month