Question

Jackson wants to have $18,000 available to buy a motorcycle in three years. How much should Jackson save each month if he earns 5% interest, compounded monthly?

Answer 1

Answer:

The per month which Jackson have to save for motorcycle is $1291.54

Step-by-step explanation:

Given as :

The Amount = $18000

The rate of interest compounded monthly = 5%

the Time period = 3 years

Let the principal = P

Now, From compounded monthly method

Amount = Principal × $(1+\frac{Rate}{12\times 100})^{12\times Time}$

Or, $18000 = P × $(1+\frac{5}{1200})^{36}$

Or, $18000 = P × ($1.004167^{36}$)

∴   P = $\frac{18000}{1.1614}$ = $15498.536

So, The amount which have to save per month = $\frac{15498.536}{12}$ = $1291.54

Hence The per month which Jackson have to save for motorcycle is $1291.54   Answer

Answer 2

this is the correct answer