Kaylee wants to go to Texas A&M where the tuition is $12,000 per year. She has a scholarship that pays for 30% of the tuition for the fi

Question

Kaylee wants to go to Texas A&M where the tuition is $12,000 per year. She has a scholarship that pays for 30% of the tuition for the first year. How much will Kaylee have to save monthly to cover the rest of her tuition if she saves for 2 years? *

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Khải Quang 4 years 2021-08-13T12:49:29+00:00 1 Answers 2 views 0

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  1. kiet
    0
    2021-08-13T12:50:31+00:00
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    Answer:

    Monthly deposit= $323.78

    Step-by-step explanation:

    Giving the following information:

    Future Value (FV)= 12,000*0.7= $8,400

    Number of periods (n)= 2*12= 24

    We weren’t provided with the interest rate, suppose an annual interest rate of 8%.

    Interest rate= 0.08/12= 0.00067

    Now, to calculate the monthly deposit, we need to use the following formula:

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

    A= monthly deposit

    Isolating A:

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

    A= (8,400*0.0067) / [(1.0067^24) – 1]

    A= $323.78

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