Mitch is attending a 4-year college. As a freshman, he was approved for a 10-year, federal
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It takes 10.155 years until you have $3,000 ⇒ 3rd
Step-by-step explanation:
The formula for compound interest, including principal sum is:
, where
- A is the future value of the investment/loan, including interest
- P is the principal investment amount
- r is the annual interest rate (decimal)
- n is the number of times that interest is compounded per unit t
- t is the time the money is invested or borrowed for
∵ You decide to put $2,000 in a savings account
∴ P = 2000
∵ You want to save for $3,000
∴ A = 3000
∵ The account has an interest rate of 4% per year and is
compounded monthly
∴ r = 4% = 4 ÷ 100 = 0.04
∴ n = 12 ⇒ compounded monthly
- Substitute all of these values in the formula above to find t
∵
- Divide both sides by 2000
∴
∴
- Change the mixed number to an improper fraction
∴
- Insert ㏒ for both sides
∴
- Remember
∴
- Divide both sides by
∴ 121.84 = 12 t
- Divide both sides by 12
∴ 10.155 = t
It takes 10.155 years until you have $3,000
Learn more:
You can learn more about the compound interest in brainly.com/question/4361464
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