Bill wants to attend a college with a current tuition of $10,000 a year. He will graduate from high school in five years. Roughly how much will Bill need to save for one-year’s tuition to account for an annual rate of inflation of 3%? $638.30 $667.50 $656.50 $633.30

$1,592.74

Explanation:

The computation is shown below;

The future value be

= Present value × (1 + rate of interest)^time period

= $10,000 × (1 + 0.03)^5

= $10,000 × 1.159274074

= $11,592.74

Now the more amount would be

= $11,592.74  - $10,000

= $1,592.74

This is the answer but the same is not provided in the given options

Hence, the more amount is $1,592.74

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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