If we're expecting 7.5% of an increase of our $3,000 in 40 years, then we need to figure out how much of an increase we will get for the 5 plus years.
1.We're constantly dividing until we get the left side to 5 (years).
7.5% -- 40 (Half of 40 is 20, so let's divide by 2 on both sides)
3.75% -- 20 (Half of 20 is 10, so let's divide by 2 on both sides)
1.875% -- 10 (Half of 10 is 5, so let's divide 2 on both sides)
0.9375% -- 5 (We've reached our goal!)
2. Now we have to plug in.
$3,000 x 7.5 = 22,500 (Initial)
Our New Problem with 45 Years Total:
Answer: $3,000 x 8.4375 = $25,312.5
(I never completed a problem like this before, so I hope that this helps. Goodluck.)
