The amount after five years is calculated by compound interest to be $19733 and it can pay for the first year of college.
For the first year;
Initial money invested = $6,000
Money deposited monthly throughout the year = 12 × $175 = $2100
Total principal = $6,000 + $2100 = $8,100
Interest = $8,100 × 4.85 × 1/100 = $392.85
Second year;
Principal = $8,100 + $392.85 + $2100 =$ 10592.85
Interest = $ 10592.85 × 4.85 × 1/100 = $ 513.75
Third year;
Principal = $ 10592.85 + $ 513.75 + $2100 = $13206.6
Interest = $13206.6 × 4.85 × 1/100 = $640.5
Fourth year;
Principal = $13206.6 + $640.5 + $2100 = $15947.1
Interest = $15947.1 × 4.85 × 1/100 = $773.4
Fifth year;
Principal = $15947.1 + $773.4 + $2100 = $18820.5
Interest = $18820.5 × 4.85 × 1/100 = $912.8
Money at the end of five years; $18820.5 + $912.8 = $19733
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