Question

How long would it take an investment to triple if it earns 1.5% interest, compounded monthly? Round your answer to the nearest hundredth.

Answer 1

Answer:

73.3 years

Step-by-step explanation:

Use the Compound Amount formula:

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

Here A = 3P, r = 0.015, n = 12, and so we have:

3 = (1 + 0.015/12)^(12*t).  Find t (in years)

3 = (1.00125)^(12*t)

Take the log of both sides.  We get:

log 3 = (12*t)(log 1.00125), or  0.47712 = (12*t)(5.425*10^(-4)

                                                 0.47712

Solving this for t, we get   t = ---------------------------  =  73.3 years

                                                 (12)(5.425*10^(-4))