SOLUTION: You decide to put $175 in a savings account to save for a $3,000 down payment on a new car. If the account has an interest rate of 3% per year and is compounded monthly, how long d

Question 976002: You decide to put $175 in a savings account to save for a $3,000 down payment on a new car. If the account has an interest rate of 3% per year and is compounded monthly, how long does it take you to earn $3,000 without depositing any additional funds?
Answer by FrankM(1040) (Show Source): You can put this solution on YOUR website!
$175 * (1.0025)^N = 3000
1.0025^N=17.1429
N(ln1.0025)=ln17.1429)
N= 1138months or 94.8 years.
Note, at 3% it takes about 24 months to double one's money. 96 years is about 4 doubles or 16X. This is a 'back of napkin' method to just see if the answer makes sense. It helps if you mess up and hit the wrong keys on the calculator.
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