what do i have to do to solve this?
Khety must save $5050 for a down payment on a car. He currently has $1925 in an account yielding 6.5% simple interest. If he saves no additional money, how long until he has enough for the down payment?
Future value = Present value (1 + interest rate)^n, where n = number of years.
5050 = 1925(1.065)^n
Rearranged n= (log 5050 - log 1925)/log (1.065)
a couple invests $4500 in an account paying 7% compounded quarterly. how much is in the account after one year?
a sequence of yearly payments of $6000 is invested at an interest rate of 4.5%, compounded annually. what is the total amount of the annuity after 12 years?
To solve this problem, you need to use the formula for simple interest:
I = P * r * t
Where:
I = Interest
P = Principal amount (initial amount)
r = Interest rate
t = Time (in years)
In this case, you know the following:
P = $1925
r = 6.5% or 0.065 (in decimal form)
You want to find the time, t, it will take for the money to grow to the amount needed for the down payment, which is $5050.
To isolate t in the formula, you can rearrange the formula to solve for t:
t = I / (P * r)
First, calculate the interest, I, for the desired down payment amount:
I = $5050 - $1925
Next, plug in the values into the formula:
t = (5050 - 1925) / (1925 * 0.065)
Simplifying the calculation:
t = 3125 / 125.125
Dividing the numerator by the denominator:
t ≈ 24.94
Therefore, it will take approximately 24.94 years for Khety to have enough money for the down payment on the car, assuming he saves no additional money during this time.