Question

The Hartman family is saving $400 monthly for Ronald’s college education. The family anticipates they will need to contribute $20,000 toward his first year of college, which is in 4 years. Which best explains whether the family will have enough money in 4 years?
The family will not have enough money. They will have saved only $16,000.
The family will not have enough money. They will have saved only $19,200.
The family will likely have enough money. They will have saved $16,000 and have accumulated interest.
The family will likely have enough money. They will have saved $19,200 and have accumulated interest.

Answer 1

400 per month for 4 years = 400 × 48 = $19,200 saved by contributions. If that money earns interest before the 4 years are up, the account balance will be more than $19,200 and could reach $20,000.

So the best choice is:
"The family will likely have enough money. They will have saved $19,200 and have accumulated interest."