Question

Demitri's parents begin saving for his college fund when Demitri is 10 years old. They invest $5,000 in an account that earns 1.2% interest compounded annually. When Demitri turns 18, he decides to attend a local community college for two years. One year of courses at the community college costs approximately $2,700. Is there enough money available from the investment to pay for the first two years of Demitri's college education?

Answer 1

The correct answer would be H. Yes, the CD earns over $500 in interest over 8 years.

Explanation:

I had the same question as you, and I got it correct!

Answer 2

yes

Explanation:

A = P(1 + r)^t

A = total amount

P = principal

r = interest rate, as a decimal

t = time, in years

A = 5000·[(1 + .012)^8]

A = 5000(1.1001)

A = 5,500.65

amount of investment after 8 years = $5,500.65

two years of community college = $5,400