Answer:
$32,000 is the total tuition cost if accept the offer.
Explanation:
This year tuition cost = $16,000
Next year tuition cost (Future Value ) = $16,640
Tuition cost is payable in the beginning of the year.
16,000 is payable today and 16,640 payable after a year But to take the offer, it is paid today
Total Tuition bill = This year tuition cost + Present value of next year tuition cost
= $16,000 + Future Value (1 + r)
= $16,000 + ($16,640 / (1+ 0.04)
= $16,000 + $16,000
= $32,000
