Question

Carly will be going to college in 3 years. She anticipates that she will need $12,000 to pay for the first year. She currently has $2,900 in a savings account. Without including any interest earned, what is a reasonable estimate of the amount Carly needs to deposit into the savings account per month over the next 3 years to be able to pay for her first year of college?
$150
$250
$350
$450

Answer 1

She needs $12,000 − $2,900 = $9,100 more. Over 3 years (36 months) that’s $9,100 ÷ 36 ≈ $252.78 per month, so $250 is the reasonable estimate.