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DIA [1.3K]
4 years ago
10

How many years would it take for a dollar to triple in value if it earns a 6 percent rate of return

Business
1 answer:
ZanzabumX [31]4 years ago
6 0

Answer:

about 19 years

Explanation:

The formula for determining the total amount at the end of an investment, with interest compounded annually is,

P * (1+r)^{n} = F

where P is the amount invested,

r is the rate of return

n is the number of years

and F is the total amount at the end of the investment.

Therefore, for $1 invested today to triple ($3) at 6% annual rate,

1 * (1+0.06)^{n} = 3

= (1+0.06)^{n} = 3

By interpolation, the value of n that satisfies the equation is 18.9.

Therefore, the investment will triple in 18.9 years.

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