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Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's university education. Currently university tuition, books, fees, and other costs average $12,500 per year. On average, tuition and other costs have historically increased at a rate of 4% per year.
-Assuming that costs continue to increase an average of 4% per year,tuition and other costs for one year for this student in 18 years when she enters university will be closest to:
Fiat Money
Currency that a government has declared to be legal tender, despite it having no intrinsic value or being backed by a physical commodity.
Liability
A legal financial obligation or debt that an entity owes to another entity, required to be settled through the transfer of assets, provision of services, or other financial settlement.
Federal Reserve Note
The official paper currency of the United States, issued by the Federal Reserve, and the most common form of U.S. banknotes in circulation.
Token Money
Money whose face value exceeds its cost of production, typically involving coins and paper money not backed by a commodity.
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