Jackson wants to have $18,000 available to buy a motorcycle in three years. How much should Jackson save each month if he earns 5% interest, compounded monthly?
Accepted Solution
A:
Answer:The per month which Jackson have to save for motorcycle is $1291.54Step-by-step explanation:Given as :The Amount = $18000The rate of interest compounded monthly = 5% the Time period = 3 years Let the principal = PNow, From compounded monthly method Amount = Principal × [tex](1+\frac{Rate}{12\times 100})^{12\times Time}[/tex]Or, $18000 = P × [tex](1+\frac{5}{1200})^{36}[/tex]Or, $18000 = P × ([tex]1.004167^{36}[/tex]) ∴ P = [tex]\frac{18000}{1.1614}[/tex] = $15498.536 So, The amount which have to save per month = [tex]\frac{15498.536}{12}[/tex] = $1291.54 Hence The per month which Jackson have to save for motorcycle is $1291.54 Answer