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?

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 ?

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