Question

Consider a $100 investment earning 12% compounded quarterly. how long will it take to triple your money? round your answer to the nearest tenth of a year.

Answer 1

Summarizing the question,
Principle(P)=$100
Rate (r)=12%=0.12
Amount (A)=3×P=$300
Time=t=?
n=no of times the interest is compouned per year=4
Then,
A=P{(1+r/n)}^(n×t)
or,300=100×{1+0.12/4}^(4×t)
or,300/100=(1+0.03)^(4×t)
or,3=1.03^(4×t)
Taking log on both sides,
log3=log[(1.03)^(4×t)]
or,log3= (4×t)×log(1.03)
or,4t=log3/log(1.03)
or,t=log3/[4×log(1.03)]
or, t=9.29175...
t=9.3 years ANS!!!