The cost of tuition at a large public university was $390 per credit hour 5 years ago. The cost today (exactly 5 years later) is $585. The annual rate of increase is closest to:

(a) 5%
(b) 7%
(c) 9%
(d) 11%


390 = 585(P/F,i,5)
(P/F,i,5) = 0.6667
From tables, i is between 8% and 9%
Answer is (c)

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