Mason earned 1,000.00 from a summer job and put it in a savings account that earns 13% interest compounded monthly. When Mason started college, he had 3,094.00 in the account which he used to pay for tuition. How long was the money in the account?Round your answer to the nearest month.

Solution

M a so n e a r n e d 1, 000.00 f ro m a s u mm er j o b an d p u t i t in a s a v in g s a cco u n t t ha t e a r n s 13% in t eres t co m p o u n d e d m o n t h l y . Wh e n M a so n s t a r t e d co ll e g e, h e ha d 3, 094.00 in t h e a cco u n t w hi c h h e u se d t o p a y f or t u i t i o n . Ho w l o n g w a s t h e m o n ey in t h e a cco u n t ? R o u n d yo u r an s w er t o t h e n e a res t m o n t h .

Time : 2.17

Solution steps

Translate the problem into an equation:

4094 = 3094 (1 + \frac{0.13}{12})^{12 t}

Solve for

t, 4094 = 3094 (1 + \frac{0.13}{12})^{12 t} : t = 2.17

Time : 2.17