If College Tuition and Fees Increase at an Annual Rate

question 75

Essay

If college tuition and fees increase at an annual rate of 7% per year,and your little sister is currently starting her freshman year in high school,what is the expected cost of her first year of college in four years if tuition and fees are currently $6,850 per year? How much for the start of her senior year of college starting three years after that?

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Definitions:

Common Property Resource

Resource to which anyone has free access.

Efficient Use

Utilization of resources in such a way that maximizes the production of goods and services at lowest cost.

Coase Theorem

A principle stating that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property.

Usage Fee

A charge imposed for using a particular service or facility, typically structured according to the extent or duration of use.