In two years Boris plans to enroll at Cleese University, a prestigious university in the Pacific Northwest of the USA
If the current tuition is $23,500 per year and is expected to increase at a rate of 6% per year, how much will Boris pay in tuition his first year of school? (His first tuition payment is exactly two years from today.) In his fourth year? (His last tuition payment is exactly 5 years from today) (Rounded to the nearest dollar.)
A) $23,500 and $29,668
B) $26,405 and $29,668
C) $23,500 and $31,448
D) $26,405 and $31,448
Answer: D
Explanation: D) FV = PV*(1 + r)n = $23,500 ∗ (1.06)2 = $26,405 and $23,500 ∗ (1.06)5 = $31,448
MODE = END
INPUT 2 6 -23,500 0 ?
KEY N I/Y PV PMT FV
CPT 26,405
MODE = END
INPUT 5 6 -23,500 0 ?
KEY N I/Y PV PMT FV
CPT 31,448
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