How long must one wait for an initial investment of $2,000 to triple in value if...

Question

Question

How long must one wait for an initial investment of $2,000 to triple in value if the investment earns 7% compounded annually?

Answer 1

Answer #1

Compound Interest Formula

A = P x (1 + r)ⁿ

Annuity = Principal x (1 + interest %)^Years

(3 x 2000) = 2,000 x (1 + 7%)ⁿ

Divide 2,000 on both sides

3 = 1.07ⁿ

Insert log option

log (3.00) = log (1.07ⁿ)

log (3.00) = n log (1.07)

n = log (3.00) / log (1.07)

n = 1.0986122886681098 / 0.06765864847381486

n = approx. 16.23 [or] 16 years and 3 months.

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Answer 2

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