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 8,186.47?
A. Yes, $8,186.47 is 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 $8,186.47.
B. Yes, $8,186.47 is enough to cover the cost of 2 years at a 2-year public institution. Without earning interest, it would take Christian approximately 4 years to save up $8,186.47.
C. No, $8,186.47 is 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 $8,186.47.
No, $8,186.47 is enough to cover the cost of 2 years at a 2-year public institution. Without earning interest, it would take Christian approximately 4 years to save up $8,186.47.
A. Yes, $8,186.47 is 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 $8,186.47.
are you sure this is correct?
I apologize for the error in my response. Let's recalculate the information.
To determine if $8,816.47 is enough to cover the cost of 2 years at a 2-year public institution, we need to calculate the total cost of tuition for those two years.
The annual cost of a 2-year public institution is $3,900, so the total cost for 2 years would be $3,900 * 2 = $7,800.
Since $8,816.47 is greater than $7,800, it would be enough to cover the cost of 2 years at a 2-year public institution.
As for the second part of the question, if Christian saved the money without gaining any interest, it would take him approximately $8,186.47 / $170 = 48.15 months to save up $8,186.47.
So, without earning any interest, it would take Christian approximately 48.15 months, which is approximately 4 years and 1 month, to save up $8,186.47.
Therefore, the correct answer is:
B. Yes, $8,186.47 is 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 1 month to save up $8,186.47.