Answer + Explanation:
To calculate how many years the investment will be able to cover Rayelle's college costs, we need to know the annual cost of tuition, fees, room, and board at a public college. Let's assume that this cost is $20,000 per year.We also need to know the future value of the investment after 15 years. Using the compound interest formula, we can calculate that the future value of the investment will be:
FV = PV * (1 + r/12)^(n*12)
where PV is the present value of the investment, r is the annual interest rate, n is the number of years, and FV is the future value of the investment.Plugging in the numbers, we get:
FV = $15,000 * (1 + 0.045/12)^(15*12) = $29,286.95
So, after 15 years, the investment will be worth $29,286.95.To calculate how many years the investment will be able to cover Rayelle's college costs, we can divide the future value of the investment by the annual cost of college, and then divide by 12 to get the number of years in months. This gives us:
Years = FV / (Annual cost of college) / 12
Years = $29,286.95 / $20,000 / 12 = 12.24 years
So, the investment will be able to cover Rayelle's college costs for approximately 12 years and 3 months. Rounded to the nearest month, the answer is 147 months. Therefore, the investment will be able to cover Rayelle's college costs for about 147 months.
Hope this helps!
- Dante