Examining a savings plan for college Reuben wants to attend a college that will cost \( \$ 24,600 \) for the first year. His uncle gave him a special gift of \( \$ 3000 \) to use toward the cost. Reuben plans to attend the college in 6 years. How much must Reuben save each month to have enough for the first-year cost? \( \$ \square \)
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To cover his college cost of \( \$ 24,600 \), Reuben starts with \( \$ 3,000 \) from his uncle. That means he needs to save \( \$ 24,600 - \$ 3,000 = \$ 21,600 \). Since he has 6 years to save, that's a total of \( 6 \times 12 = 72 \) months. Dividing the amount he needs by the number of months gives us \( \$ 21,600 \div 72 \approx \$ 300 \). So, Reuben must save approximately \( \$ 300 \) each month. If Reuben is diligent and saves that \( \$ 300 \) monthly, by the time college rolls around, he'll be fully prepared! Plus, if he opts for a high-yield savings account, he could earn some extra interest. If, for example, he earns 1% interest compounded monthly, he might lower his monthly savings a little or have some funds left over as a nice college starter!
