Luke’s parents started a savings account to help him pay for college or a technology school when he turned 11 years old. Each month they put $125 into the savings account, and they continued this until he was 18 years old. The savings account did not accumulate any interest. Luke figured out that the first year of a technology school that he wanted to attend would cost him $12,480. If he had one year to save the rest of the money, how much would he need to save each month?

Question

Luke’s parents started a savings account to help him pay for college or a technology school when he turned 11 years old. Each month they put $125 into the savings account, and they continued this until he was 18 years old. The savings account did not accumulate any interest. Luke figured out that the first year of a technology school that he wanted to attend would cost him $12,480. If he had one year to save the rest of the money, how much would he need to save each month?

$1,980

$40

$1,040

$165

Answer 1

Luke has 7 years between ages 11 and 18 to save for his first year of technology school. At $125 deposited into the savings account each month, he would have $125 x 12 months x 7 years = $10,500 saved up by the time he is 18.

To calculate how much more he needs to save to reach $12,480, we would subtract his current savings from the total cost of the school:

$12,480 - $10,500 = $1,980

Therefore, Luke would need to save $1,980 over the course of one year. Dividing this amount by 12 months gives us the amount he would need to save each month:

$1,980 / 12 months = $165

So, Luke would need to save $165 each month for the next year in order to reach his goal of $12,480 for his first year of technology school.