Assuming That University Costs Continue to Increase an Average of 4

question 62

Multiple Choice

Assuming that university costs continue to increase an average of 4% per year and that all her university savings are invested in an account paying 7% interest, then the amount of money she will need to have available at age 18 to pay for all four years of her undergraduate education is closest to:

• A)$97 110
• B)$101 291
• C)$107 532
• D)$50 000

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Definitions:

Presentation Currency

The form of money used to express the financial records of a company.

Net Profit

The amount of income that remains after subtracting all expenses, taxes, and costs from total revenue.

Monetary Items

Assets and liabilities that are to be received or paid in a fixed or determinable amount of money.

Payables

Amounts that a company owes to its creditors or suppliers for goods or services received.