Question

Lief starts saving for his future and deposits $425 each month at 5.7% annual interest, compounded monthly, for 25 years. At the end of 25 years, he has an account balance of $281,292.21. How much of this did Lief contribute and how much of this is interest?

Answer 1

Using proportions, it is found that the amounts are given as follows:

• Amount deposited: $127,500.

• Amount of interest: $153,792.21.

What is a proportion?

A proportion is a fraction of a total amount, and the measures are related using a rule of three.

The amount deposited is of $425 each month for 25 years, that is, $425 in 25 x 12 times, that is:

D = 425 x 25 x 12 = $127,500.

The amount of interest is the total amount subtracted by the amount deposited, hence:

I = 281,292.21 - 127,500 = $153,792.21.

More can be learned about proportions at https://brainly.com/question/24372153

#SPJ1