00:01
You're trying to save to buy a new car valued at $42 ,650.
00:06
You have $40 ,000 today that can be invested at your bank.
00:10
The bank pays 4 .2 % annual interest on its accounts.
00:15
How long before you have enough to buy the car for cash? so what we're going to do is figure out how much interest we need to earn.
00:26
So we know that we have $40 ,000 and we need $42 .650.
00:34
So we need to earn $2 ,650 in interest.
00:39
This is going to be, this does not say it's compounded.
00:51
So we're just going to go ahead and consider this as simple interest.
00:54
Interest equals principle times rate times time.
00:58
So our interest we want to earn is $2650.
01:01
The principle we're going to have in the account is $40 ,000.
01:05
And we're going to have an interest rate of 4 .2%, which we're going to make is 0 .42.
01:13
So that means we'll be able to find our time.
01:16
So let's go ahead and do that multiplication.
01:22
That would be 1680 equals to 2650, and there's our t.
01:29
So if we divide by 1680, we would get $16 .80...