#4 NEWS PRICE EFFECTS RE U.S. Colleges Raise Tuition 4.8%, outpacing inflation T

Question

#4 NEWS PRICE EFFECTS RE U.S. Colleges Raise Tuition 4.8%, outpacing inflation Tuition and fees at U.S. public universities rose 4.8 percent this year to an average $8,655, as the smallest increase in 12 years still outpaced inflation, a College Board report found. "It's an improvement in a bad story," said Sandy Baum, an independent policy analyst for the College Board. Nonprofit private colleges increased tuition and fees 4.2 percent to $29,056. The public college increase outstripped the rate of inflation, which was about 2%. In 2012-2013 by what percentage, did (a) the nominal price and (b) the real price of tuition at public colleges increase? _percent percent

Explanation / Answer

Solution :- (a). Percent increase in nominal price during Year 2012-2013 = [ (29056 - 8655) / 8655 ] / 12

= (20401 / 8655) / 12

= 2.3571 / 12

= 0.1964 i.e., 19.64 % (0.1964 * 100)

(b). Percent increase in real price during Year 2012-2013 = 19.64 % - 2.00 %

= 17.64 %

Conclusion :-

(a). Percent increase in nominal price during Year 2012-2013 19.64 % (b). Percent increase in real price during Year 2012-2013 17.64 %

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