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4 November, 23:24

Alfred is saving up money for a down payment on a townhouse. He currently has $5016$ 5016, but knows he can get a loan at a lower interest rate if he can put down $5994$ 5994. If he invests the $5016$ 5016 in an account that earns 4.4%4.4% annually, compounded monthly, how long will it take Alfred to accumulate the $5994$ 5994? Round your answer to two decimal places, if necessary.

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  1. 5 November, 03:12
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    It will take Alfred to accumulate the $5994 annually 4.1367 and monthly 4.0557

    Explanation:

    In order to calculate how long will it take Alfred to accumulate the $5994 we would have to use the following formula:

    A=P (1+r/n) ∧n*t

    P=$5,016

    A=$5994

    r=4.4%

    n=1 annually

    n=12 monthly

    Therefore, t annually would be as follows:

    5,994=$5,016 (1 + (4.4%/100) / 1) ∧1*t

    t=4.1367

    Therefore, t monthly would be as follows:

    5,994=$5,016 (1 + (4.4%/100) / 12) ∧12*t

    t=4.0557

    It will take Alfred to accumulate the $5994 annually 4.1367 and monthly 4.0557
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