Monthly Contribution
Total Amount After 3 Years of Investment
with a 4.2% Annual Interest Rate (dollars)
(dollars)
125
4,803.64
175
6,725.09
225
8,646.54
300
11,528.72
The information in the table shows how much a specific monthly contribution can result in after 3 years of investment with a 4.2% ann interest rate, compounded monthly.
On average, the annual cost to attend a 2-year public institution in the 2020-2021 academic year is $3,900. If the goal is to cover the c for two years at a 2-year public institution after 3 years of investment, what is the minimum amount a student should be saving each month?
(1 point)
$225
$125
$300
$175
To cover the cost for two years at a 2-year public institution, the student would need to save a minimum amount that is equal to or greater than $7,800 ($3,900 x 2).
Looking at the table, the closest monthly contribution amount that would result in a total amount after 3 years of investment equal to or greater than $7,800 is $225. Therefore, the minimum amount a student should be saving each month is $225.
So, the correct answer is:
$225