Hillary Is Trying to Determine the Cost of Health Care

question 12

Multiple Choice

Hillary is trying to determine the cost of health care to college students, and parents' ability to cover those costs.She assumes that the cost of one year of health care for a college student is R1,000 today, that the average student is 18 when he or she enters college, that inflation in health care cost is rising at the rate of 10 percent per year, and that parents can save R100 per year to help cover their children's costs.All payments occur at the end of the relevant period, and the R100/year savings will stop the day the child enters college (hence 18 payments will be made) .Savings can be invested at a simple rate of 6 percent, annual compounding.Hillary wants a health care plan which covers the fully inflated cost of health care for a student for 4 years, during years 19 through 22 (with payments made at the end of years 19 through 22) .How much would the government have to set aside now (when a child is born) , to supplement the average parent's share of a child's college health care cost? The lump sum the government sets aside will also be invested at 6 percent, annual compounding.

• A) R1,082.76
• B) R3,997.81
• C) R5,674.23
• D) R7,472.08
• E) R8,554.84

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Definitions:

Great Strike Wave

A period characterized by a high number of extensive labor strikes, often reflecting widespread dissatisfaction among workers regarding wages, working conditions, and labor rights.

Labor

Pertains to work, especially manual work done for wages, and can include discussions around the workforce, employment conditions, and workers' rights.

Negotiating Partner

An entity or individual engaged in discussions aimed at reaching an agreement on a specific matter or business deal.

Change to Win

is a labor union federation aimed at revitalizing the labor movement and improving the economic status of workers by organizing them and negotiating better terms.