Question

Andrew is saving up money for a down payment on a car. He currently has $3355, but knows he can get a loan at a lower interest rate if he can put down $4045. If he invests the $3355 in an account that earns 3.7% annually, compounded monthly, how long will it take Andrew to accumulate the $4045? Round your answer to two decimal places, if necessary.

Answer 1

Answer:

5.06 years or 60.75 months

Step-by-step explanation:

Compound interest formula:

$AV=PV(1+\frac{i}{n})^{n*t}\\4045=3355(1+\frac{.037}{12})^{12t}\\1.025=(1.003)^{12t}\\log1.025_{1.003}=12t\\60.75=12t\\5.062$

5.06 years or 60.75 months