Question

You are considering investing in a bank account that pays a nominal annual rate of 14.03% compounded monthly. If you invest $3,000 at the end of each month, how many months will it take for your account to grow to $150,000?

Answer 1

Answer:

Approx. 336 months

Step-by-step explanation:

Rate of interest = 14.03%

No. of compounds per year = 12

Let t be the time in years

Amount =  $150,000

Principal = $3,000

Formula : $A=P(1+\frac{r}{n})^{nt}$

$150000=3000(1+\frac{14.03}{100 \times 12})^{12t}$

$t= 28.046$

S, time is approximately 28 years

1 year = 12 months

So, 28 years = $12 \times 28$

28 years = $12 \times 28 =336$

Hence it will take approx. 336 months for your account to grow to $150,000