Question

2. Your grandparents deposit $2000 into a bank account to start a college fund for you. They will

continue to deposit a fixed amount each month if you deposit $5 a month as well. In 36 months,
you would like to have $6500 in the account. How much will they have to contribute each
month?

Answer 1

Answer: $120

Explanation:

Given the following :

Initial deposit = $2000

Let fixed monthly deposit = d + $5 ; where d = monthly amount saved by grandparents and $5 = amount saved by you

Period of deposit = 36 months = 36 monthly deposits

Total amount required at the end of 36 months = $6500

Hence ;

$2000 + 36(d + $5) = $6500

$2000 + 36d + $180 = $6500

36d = $(6500 - 2180)

36d = $4320

d = $4320 / 36

d = $120

Monthly Amount contributed by grandparents = $120