Martha has $10,000 saved and wants to attend a college with a current tuition of $10,000 a year. She will graduate from high school in five years. Roughly how much more will Martha need to save for one-year's tuition to account for an annual rate of inflation of 3%?

A. $1,590.00

B. $1,255.00

C. $300.00

D. $3,000.00

Question

Antony Howe

Mathematics

31 August, 06:02

Martha has $10,000 saved and wants to attend a college with a current tuition of $10,000 a year. She will graduate from high school in five years. Roughly how much more will Martha need to save for one-year's tuition to account for an annual rate of inflation of 3%?

A. $1,590.00

B. $1,255.00

C. $300.00

D. $3,000.00

+4

Answers (1)

Know the Answer?

Daniella Curry · Answer 1

A: 1,590.00

Step-by-step explanation:

We can use the simple interest rate equation for this problem: p (1 + r) ^t

Step 1: Replace the variables with the amounts given

10000 (1 + 0.03) ^5

Step 2: Solve/Plug in calc

You will get 1590.00