Liam wants to save $6,265 to purchase a car. if $4,000 is deposited into an account at 7.5% interest, compounded monthly, how many years will liam have to save until he has enough to purchase the car?

To solve for time taken we use the compound formula:

A=P (1+r/100*n) ^ (n*t)

where:

A=future value

P=principle

r=rate

t=time

n=number of terms

6265=4000 (1+7.5 / (12*100)) ^ (12t)

solving for t we get

1.56625=1.00625^12t

12t=72.0136

t=6.00 years

Answer: 6 years