Question

If $1000 is invested in an account earning 3% compounded monthly, how long will it take the account to grow in value to $1500? Round to the nearest month.

Answer 1

14 months

Explanation:

1 month) 1.03(1000) = 1030

2 months) 1030(1.03) = 1060.9

3 months) 1060.9(1.03) = 1092.727

4 months) 1092.727(1.03) = 1125.50881

5 months) 1125.50881(1.03) = 1159.2740743

6 months) 1159.2740743(1.03) = 1194.05229653

7 months) 1194.05229653(1.03) = 1229.87386542

8 months) 1229.87386542(1.03) = 1266.77008139

9 months) 1266.77008139(1.03) = 1304.77318383

10 months) 1304.77318383(1.03) = 1370.01184302

11 months) 1370.01184302(1.03) = 1411.11219831

12 months) 1411.11219831(1.03) = 1453.44556426

13 months) 1453.44556426(1.03) = 1497.04893119

14 months) 1497.04893119(1.03) = 1541.96039912

I multiplied them all by 1.03 because 0.03 is 3% but if I multiplied the numbers by 0.03 it would give me 3% of that number instead of increasing it by 3% so by doing 1.03 x the number I am adding the 3% onto the number