Problema Solution
If Rachael’s tuition, fees, and expenditures for books this year total $12,000, what will they be during her senior year (three years from now), assuming costs rise 4 percent annually?
Answer provided by our tutors
this year total costs are: $12,000
next year the costs will rise 4% and will be: $12,000 + 0.04*12,000 = 1.04*12,000
in 2 years the costs will be: 1.04*12,000 + 0.04*1.04*12,000 = ((1.04)^2)*12,000
in 3 years the costs will be: ((1.04)^2)*12,000 + 0.04*((1.04)^2)*12,000 = ((1.04)^3)*12,000 = $13,498.368.