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Today Dante and Sharon had their first child and they want to begin saving for their child's education. With all the expenses of having a new child they feel they can only afford to put away $75 a month but they plan to continue doing so until the child turns 18. They are budgeting for an interest rate of 3.2%, compounded monthly.
How much money will they have in the account by their child's 18th birthday?
How much interest will be earned?
Sharon convinces Dante that because school is both very expensive and very important, they must try to save a little more each month. The review their budget once more and decide that increasing their payments to $125 each month is manageable.
How much will they have saved by their child's 18th birthday now that they have increased their payments?
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