Question

Hillary works for a company that offers 75% matching on all of her retirement contributions. For the last 36 years, Hillary has been depositing $200 into her 401(k) savings account that pays 4.99% interest annually. After 36 years, the balance has grown to $421,304.40. How much of this balance is interest?

a) $197,104.40

b) $221,304.40

c) $274,800.00

d) $301,000.00

Answer 1

The amount of the balance that is interest is $197,104.40.

Step-by-step explanation:

To find the amount of the balance that is interest, we need to subtract the initial deposit from the final balance. Hillary has been depositing $200 annually for 36 years, so her total deposits would be $200 x 36 = $7200.

Therefore, the amount of the balance that is interest is $421,304.40 - $7200 = $414,104.40. So, the answer is a) $197,104.40.