Christian has been saving $170 monthly for college. The investment account set up for him has a 3.75% annual interest rate, compounded monthly.
If Christian invests $170 monthly over a 4-year period, he will have a total amount of $8,816.47. On average, the annual cost of a 2-year public institution in the 2020-2021 academic year is $3,900.
Would this be enough for Christian to cover the cost of 2 years at a 2-year public institution? If Christian were to save the money without gaining any interest, approximately how long would it take him to reach $8,816.47?
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LESSON
FEEDBACK
O Unristian approx naray/a years end not in lo eave up Sayers qublic instilution. Witnour eaming Interest, t would take O Christian thalamen/ugard_ourS0616-2'years at a 2-year pubic instilution. Without earing interest, i would take O take Shralian the same uyears co uave u 86,818 years at a 2 -year pubile instition. without earning interest, it would No, $8,816.49 is not enough to cover the cost of 2 years at a 2-year public institution. Without earning interest, it would
take Christian approximately 4 years and 4 months to save up $8,816.47
To determine if the saved amount is enough to cover the cost of 2 years at a 2-year public institution, we need to calculate the total cost of 2 years.
Total cost of 2 years at a 2-year public institution: $3,900/year * 2 years = $7,800
Since $7,800 is less than the total amount Christian will have after 4 years ($8,816.47), it means that he will have enough money to cover the cost of 2 years at a 2-year public institution.
Now, let's calculate how long it would take for Christian to save up $8,816.47 without earning any interest. We'll assume a constant savings rate of $170 per month.
Total savings goal: $8,816.47
Time = Total savings goal / Monthly savings
Time = $8,816.47 / $170
Time ≈ 51.86 months
Since there are 12 months in a year, the approximate time it would take for Christian to reach $8,816.47 without earning any interest is 51.86 months / 12 ≈ 4 years and 4 months.