Question

Mike and Kate plan to save money for their wedding over a 20 month period. They will need to save $8,000 to help pay for the wedding. They set aside the same amount each month. After a year they saved $4,000. Mike and Kate know they must adjust their plan in order to meet their goal, so they came up with the following options: Option A: Stay with saving the same amount they've been saving each month but postpone the wedding 2 months. Option B: Increase the amount of money they save each month by $80 from what they've been saving. Which of the following is a true statement? a. Only option A will allow them to meet their goal. b. Only option B will allow them to meet their goal. c. Both options A and B will allow them to meet their goal. d. Neither option A nor option B will allow them to meet their goal.

Answer 1

Correct answer is d: Neither option A nor option B will allow them to meet their goal.

Explanation:

Money needed for wedding: 8000 in 20 months

Set aside the same amount each month: 4000 over 12 months

which becomes
`(4000)/(12)` = $333.33

Months left: 8

Lets evaluate option A first:

Save $333.33 each month and postpone wedding for two months

so by adding two months: 10 months are left till wedding

Money save in 10 months: 10 × 333.33 = $3333.33

So total will become 4000 + 3333.33 = $7333.33 (Not feasible)

Lets evaluate options B:

Increase the amount of saving by $ 80:

Amount saved each months first year: 333.33

After adding 80: 333.33 + 80 = 413.33(amount saved each month in 8 months)

8 months are left to wedding:

so they will save 8 × 413.33 = $3306.64

Total will become: 4000 + 3306.64 = $7306.64(Not feasible)

So correct answer is d: Neither option A nor option B will allow them to meet their goal.