Question

You decide to put $175 in a savings account to save for a $3000 down payment on a new car. If the account has an interest rate of 3% per year and is compounded monthly, how long does it take you to earn $3000 without depositing any additional funds?

Answer 1

94.8 years! Or 1138 months. Note: at 3% it takes about 24 months to doubles someone's money. Happy Valentines Day!! >u<

Answer 2

hence, time of investment to get $ 3000 will be 1138 months.

Explanation:

given,

money put in account = $ 175

down payment of car = $ 3000

rate of interest = 3%

as it is compounded monthly so, r = 3/12 = 0.25%

we now

`A = P(1+(r)/(100))^t`

`3000 = 175(1+(0.25)/(100))^t\\17.143=1.0025^t`

taking log both side

ln (17.143) = t ln (1.0025)

t = 1138 months or 95 years (approximately)

hence, time of investment to get $ 3000 will be 1138 months.