Theresa adds $1,500 to her savings account on the first day of each year. Marcus adds $1,500 to his savings account on the last day of each year. They both earn 6.5 percent annual interest. What is the difference in their savings account balances at the end of 35 years?

Question

Quizplus · Accepted Answer

Theresa's contributions earn interest for one more year than Marcus's contributions for each of the 35 years, except for the first contribution. The difference in their savings is the interest earned on Theresa's first 34 contributions for one additional year. Using the formula for the future value of a series, the difference can be calculated as an additional year of interest on the accumulated value of Theresa's contributions. The correct calculation leads to a difference of approximately $12,093.38, making option A the correct answer.

Theresa Adds $1,500 to Her Savings Account on the First