Question

You decide to put $100 in a savings account to save for a $3,000 down payment on a new car. If the account has an interest rate of 2% per year and is compounded monthly, how long does it take you to earn $3,000 without depositing any additional funds? a. 170.202 years
b. 14.3129 years
c. 171.755 years
d. 168.354 years

Answer 1

By using the formula: 

FV = PV*(1+r/n)^(n*t)

FV = 3000
PV = 100
 r = 0.02
 n = 12
t = ?

Substituting the values of the variables, I got a. 170.202 years. Hope that really helps.