what is the answer?

Question

~~Rozilan needs $6,000 in three years’ time. Now, he saves $3,000 in an account that pay 7% per annum simple interest. Find the amount that he must save two years from now so that he can accumulate the $6,000.

Answer 1

In two years $3000 gains 3000×2×0.07=$420, so grows to $3420. This is 6000-3420=$2580 short of the target. If the amount he needs to invest now is P, then P+0.14P=2580. So P=2580/1.14=$2263.16 needs to be invested now so that the total amount to be invested now would be 2263.16+3000=$5263.16. If he simply wants to add to the amount to make up the shortfall, then in two years’ time he needs to add $2580 to his accumulated amount.