Your university is running a special offer on tuition. This year’s tui

Your university is running a special offer on tuition. This year’s tuition cost is $18,000. Next year’s tuition cost is scheduled to be $19,080.

The university offers to discount next year’s tuition at a rate of 6% if you agree to pay both year’s tuition in full today. How much is the total tuition bill today if you take the offer?
A) $34,981.13
B) $36,000.00
C) $37,080.00
D) $38,160.00

ANSWER

B
Explanation: B) Via Calculator: N = 1, I = 6, FV = $18,000, Solve for PV = $18,000+$18,000 = $36,000.