Question

If Megan's tuition, fees, and expenditures for books this year total $22,000, what will they be during her senior year (three years from now), assuming costs rise 4 percent annually? N 3 I/Y 4 PV -22,000 PMT 0 FV CPT

Answer 1

Answer:

$24,747.01

Explanation:

This is a time value of money question. It is asking for the future value of the tuition, fees, and expenditures for books in year 3.

You can solve this using a financial calculator with the following inputs;

Total duration; N = 3

Interest rate; I/Y = 4%

Present value ; PV = -22,000

then compute Future value ; CPT FV = $24,747.008

Therefore, they will be worth $24,747.01