How many years will it take to save $20,000 if Sal saves $100 every month at a 3% yearly interest rate?

Question

asked Aug 12, 2021 94.7k views

1 Answer

Takenia · Answer 1 · 2021-08-16T21:51:00+0000

Answer:

Explanation:

Firstly we need to calculate his yearly savings if he saves $100 every month at a 3% yearly interest.

Simple interest = Principal * Rate * Time/100

Since he saves $100 per month, then in a year he will have saved 12* $100 = $1200

Calculating the interest paid on yearly savings;

Simple Interest = 1200*3*1/100

Simple Interest = $36

Amount saved yearly at 3% rate = $1200+$36 = $1236

If Sal is to save up to $20,000, it will take him up to ($20,000/$1236) i.e 16 years to reach his goal.