Question

To save for her newborn son's college education, Kelli Peterson will invest $1,500.00 at the end of each year for the next 18 years. The interest rate she expects to earn on her investment is 9%. How much money will she have saved by the time her son turns 18?

Answer 1

9% of $1500 is $15 so she gains an extra $15 for each of the 18 years

$1500 in the bank each year for 18 years is $27000 after 18 years

$15 each year as well so that’s an extra $270 in the bank

The total in the bank is the sum of what she has invested and the interest so the total in the bank is $27270

Explanation: