Exponential Equations

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

A=P(1+r/n)^nt

 

P=175

r=.03

n=12

t=?

 

3000=175(1+.03/12)^12t

3000=175(1.0025)^12t

17.14=(1.0025)^12t

log 17.14=12t log 1.0025

 

log17.14/(12 log 1.0025) = t

t = 94.83 yrs