A student is saving money to buy a used car. The student desposits $150 monthly in a savings account that pays 3% annual interest, compounded monthly.
How long will it take the student to save $5000?
5000=150 * [((1 + 0.03/12)^N - 1) / (0.03/12)], solve for N 5000 = 60000. (1.0025^N - 1) 1/12 = 1.0025^N - 1 13/12= 1.0025^N Take the log of both sides N = log(13/12)/log(1.0025) =32.057 months
