Question

Today is Sarah’s 12th birthday. She has a savings account with $515 in it, but her goal is to save $10,000 by the time she turns 18. How much money should she add to her savings account each year to reach her goal?

Answer 1

She should save $1,580.83 per year.

Explanation:

Sarah has 6 years left before she turns 18 (13, 14, 15, 16, 17, 18). Which means, however much money she doesn't have will have to be divided by 6 to get the yearly amount.

10,000 - 515 = 9,485.

9,485/6 = approximately 1580.83

As such, she should save $1,580 and 83 cents each year.