Question

Jackson wants to have $18,000 available to buy a motorcycle in three years. How much should Jackson save each month if he earns 5% interest, compounded monthly?

Answer 1

this is the correct answer

Answer 2

The per month which Jackson have to save for motorcycle is $1291.54

Explanation:

Given as :

The Amount = $18000

The rate of interest compounded monthly = 5%

the Time period = 3 years

Let the principal = P

Now, From compounded monthly method

Amount = Principal ×
`(1+(Rate)/(12* 100))^(12* Time)`

Or, $18000 = P ×
`(1+(5)/(1200))^(36)`

Or, $18000 = P × (
`1.004167^(36)`)

∴ P =
`(18000)/(1.1614)` = $15498.536

So, The amount which have to save per month =
`(15498.536)/(12)` = $1291.54

Hence The per month which Jackson have to save for motorcycle is $1291.54 Answer