+0  
 
0
79
1
avatar

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?

 Feb 10, 2020

Best Answer 

 #1
avatar
+1

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

 Feb 10, 2020
 #1
avatar
+1
Best Answer

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

Guest Feb 10, 2020

24 Online Users

avatar