how long will long will it take before you have enough money to purchase the used car?

Question

You want to buy a used car for $3750. You currently have $2750 in your savings account that earns 3% interest compounded annually. if you do not put any additional into your account, how long will long will it take before you have enough money to purchase the used car?

Answer 1

In the case of simple interest, Interest = Principal x Rate x Time

 

year 1: $2750 x 0.03 = $82.50

year 2: $2832.50 x 0.03 = $84.98

year 3: $2917.48 x 0.03 = $87.52

year 4: $3005.00 x 0.03 = $90.15

year 5: $3090.15 x 0.03 = $92.85

year 6: $3188.00 x 0.03 = $95.64

year 7: $3283.64 x 0.03 = $98.51

year 8: $3382.15 x 0.03 = $101.46
year 9: $3483.62 x 0.03 = $104.51
year 10: $3588.13 x 0.03 = $107.64
year 11: $3695.77 x 0.03 = $110.87

so, it will take about 11 years to accumulate the necessary amount.