Question

You are considering investing in a bank account that pays a nominal annual rate of 7%, compounded monthly. If you invest $3,000 at the end of each month, how many months will it take for your account to grow to $150,000?

Answer 1

44 months

Step-by-step explanation:

RATE = 7%/12

PMT = -3000

PV = $0

FV = 150000

We solve for Nper using MsExcel.

No of months = NPER(Rate, -Pmt, Pv, Fv)

No of months = NPER(7%/12, -3000, 0, 150000)

No of months = 44.00213535

No of months = 44

So, it take 44 months for the account to grow to $150,000.