Question

Tuition for one year at the Community College of Camelot costs $6,000 per year. Avalon would like to attend this college and will save money each month for the next 2 years in order to reach her goal. Her parents will contribute 50% for his first year's tuition. If Avalon also receives a local scholarship for $600, how much money will she need to save each month for the next 2 years to have enough money for her first year of college?

Answer 1

Answer:

Monthly deposit= $92,51

Step-by-step explanation:

Giving the following information:

I will assume an interest rate of 8% compounded monthly.

Tuition=  $6,000 per year.

Number of periods= 2*12= 24 months

i= 0.08/12= 0.0067

Her parents will contribute 50% for his first year's tuition.

Local scholarship= $600

First, we need to determine future value:

Future value= (6,000/2) - 600= $2,400

Now, using the following formula, we can calculate the monthly deposit:

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (2,400*0.0067) / [(1.0067^24) - 1]

A= $92,51