Question

Susan opened a college savings account 4 years ago. She opened the account with an initial deposit of $3,000. Starting the next year, she deposited $1,000 on the same day each year. The account earns interest at an annual rate of 4.15% and is compounded annually. Susan hopes to have earned enough interest to pay for her first year of college tuition, which costs $7,100. What is the difference between her ending balance after 4 years and the cost of her tuition?

Answer 1

$20

Explanation:

multiply 100.00 x 5% which is 100x 0.05, then it will give you 5.

add 5, 4 more times which will give you 20