Question

You can afford monthly deposits of 140 into an account that pays 3.8% compounded monthly. How long will be untl you have $11.300 to buy a boat? Type the number of months: (Round to the next higher month it not exact Question He Check Answer Enter your answer in the answer box and then click Check Answer All parts showing

Answer 1

72 months approx.

Explanation:

Monthly deposit = m = $140

r = 3.8% or 0.038

Amount needed in the account = A = $11300

The formula will be :

`11300=140(((1+0.038/12)-1)/(0.038/12) )`

`11300=140(((1+0.038/12)-1)/(0.003166))`

`11300=44219.83((1.003166)^(m)-1)`

`0.2555=(1.003166)^(m)-1`

`1.2555=(1.003166)^(m)`

m=log1.2555/log1.003166

m =71.98 ≈ 72

Hence, it will take 72 months approx.