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You want to buy a new computer for $1500. You only have $500 right now, so you decide to deposit the money into an account yeilding 5% interest compounded monthly, how long until you have enough to buy the computer

2 Answers

8 votes

Answer:

Twenty-two months (a year and ten months)

Explanation:

First, we have to find how much is 5% of 500

500 x 0.05 = 25

Next, you add it to 500

so after the first month, you will have $525

Then, we have to find 5% of 525

525 x 0.05 = 26.25

meaning that after the second month, you'll have $551.25

We keep on repeating these steps until we reach the desired amount.

month three:

$551.25 x 0.05 = 27.5625

551. 25 + 27.5625 = 578.8125

month four:

578.8125 x 0.05 = 28.940625

578.8125 + 28.940625 = 607.753125

month five:

607.753125 x 0.05 = 30.38765625

607.753125 + 30.38765625 = 638.14

month six:

638.14 x 0.05 = 31.91

638.14 + 31.91 = 670.05

month seven:

670.05 x 0.05 = 33.51

670.05 + 33.51 = 703.55

month eight:

703.55 x 0.05 = 35.18

703.55 + 35.18 = 738.73

month nine:

738.73 x 0.05 = 36.94

738.73 + 36.94 = 775.67

month ten:

775.67 x 0.05 = 38.78

775.67 + 38.78 = 814.45

month eleven:

814.45 x 0.05 = 40.72

814.45 + 40.72 = 855.17

month twelve:

855.17 x 0.05 = 42.76

855.17 + 42.76 = 897.93

month thirteen:

897.93 x 0.05 = 44.90

897.93 + 44.90 = 942.83

month fourteen:

942.83 x 0.05 = 47.14

942.83 + 47.14 = 989.97

month fifteen:

989.97 x 0.05 = 49.50

989.97 + 49.50 = 1039.47

month sixteen:

1039.47 x 0.05 = 51.97

1039.47 + 51.97 = 1091.44

month seventeen:

1091.44 x 0.05 = 54.57

1091.44 + 54.57 = 1146.01

month eighteen:

1146.01 x 0.05 = 57.30

1146.01 + 57.30 = 1203.31

month nineteen:

1203.31 x 0.05 = 60.17

1203.31 + 60.17 = 1263.48

month twenty:

1263.48 x 0.05 = 63.17

1263.48 + 63.17 = 1326.65

month twenty-one:

1326.65 x 0.05 = 66.33

1326.65 + 66.33 = 1392.98

month twenty-two:

1392.98 x 0.05 = 69.65

1392.98 + 69.65 = 1462.63

month twenty-three:

1462.63 x 0.05 = 73.13

1462.63 + 73.13 = 1535.76

So your final answer would be that it would take twenty-two months (a year and ten months) to have enough money to buy the computer.

p.s. sorry for the super long answer, I wanted to make sure you had the complete process. hope this helped!

User Jose Pose S
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3.1k points
12 votes
5,600, it's basic math, ur welcome
User Takemyoxygen
by
3.7k points