The Lopez family is saving $275 monthly for Verona's college education. They expect to contribute $10,000 toward Verona's first year of college in 3 years. Which best explains whether they will have enough money after saving for 3 years?

The Lopez family is saving $275 monthly for Verona's college education. They expect to contribute $10,000 toward Verona's first year of college in 3 years. Which best explains whether they will have enough money after saving for 3 years?

• A. They will definitely have enough money; they will have saved $9,900.
• B. They will likely have enough money; they will have saved $9,900 with interest.
• C. They will not have enough money; they will save only $8,000.
• D. They will have exactly $10,000 with interest.

Answer: (B)

The main idea is to compare how much money is saved over three years and how interest can boost that amount. If you save 275 each month for 36 months, you’ll have 275 × 36 = 9,900 before any interest. That means without interest you’d be short of 10,000. But money left in savings typically earns interest, so the total will be more than 9,900. With even a small amount of interest, the total can reach or exceed 10,000, making it likely you’ll have enough to contribute 10,000 for the first year. The wording reflects that possibility: you’ll have 9,900 with interest, meaning the total could be at least 10,000 depending on the rate. The other choices either claim certainty or misstate the base amount, which doesn’t fit the calculation.

The main idea is to compare how much money is saved over three years and how interest can boost that amount. If you save 275 each month for 36 months, you’ll have 275 × 36 = 9,900 before any interest. That means without interest you’d be short of 10,000. But money left in savings typically earns interest, so the total will be more than 9,900. With even a small amount of interest, the total can reach or exceed 10,000, making it likely you’ll have enough to contribute 10,000 for the first year. The wording reflects that possibility: you’ll have 9,900 with interest, meaning the total could be at least 10,000 depending on the rate. The other choices either claim certainty or misstate the base amount, which doesn’t fit the calculation.