The average annual cost of college at 4-year private colleges was $30,094 in the 2013–2014 academic year. This was a 3.8% increase from the previous year. (a) If the cost of college increases by 3.8% each year, what will be the average cost of college at a 4-year private college for the 2033–2034 academic year? (b) College savings plans, such as a 529 plan, allow individuals to put money aside now to help pay for college later. If one such plan offers a rate of 2% compounded continuously, how much should be put in a college savings plan in 2015 to pay for 1 year of the cost of college at a 4-year private college for an incoming freshman in 2033?
The average annual cost of college at 4-year private colleges was $30,094 in the 2013–2014 academic year. This was a 3.8% increase from the previous year. (a) If the cost of college increases by 3.8% each year, what will be the average cost of college at a 4-year private college for the 2033–2034 academic year? (b) College savings plans, such as a 529 plan, allow individuals to put money aside now to help pay for college later. If one such plan offers a rate of 2% compounded continuously, how much should be put in a college savings plan in 2015 to pay for 1 year of the cost of college at a 4-year private college for an incoming freshman in 2033?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The average annual cost of college at 4-year private colleges was $30,094 in the 2013–2014
academic year. This was a 3.8% increase from the previous year.
(a) If the cost of college increases by 3.8% each year, what will be the average cost of college
at a 4-year private college for the 2033–2034 academic year?
(b) College savings plans, such as a 529 plan, allow individuals to put money aside now to
help pay for college later. If one such plan offers a rate of 2% compounded continuously,
how much should be put in a college savings plan in 2015 to pay for 1 year of the cost of
college at a 4-year private college for an incoming freshman in 2033?
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