Question

Johanna's grandmother gives her $8,000 to pay for the entire first year's tuition at a state college, a year from now. johanna puts the money into her checking account, but during the next year, inflation is expected to be 10% and the tuition of her college increases with inflation. how much additional money must johanna come up with to pay her tuition?

Answer 1

Johanna must come up with 800 more dollars in order to pay her college tuition. This number is calculated by multiplying 8,000 by 10% (or .10). When these calculations are completed, you get the number 800. Because the college tuition increases by 10%, calculating 10% of 800 tells you the amount risen due to inflation.