Explanation:
Question:
How long will it take an investment to triple, if the interest is
7
%
and compounded quarterly?
Future Value:
You have to find time that will it take an investment to triple. The amount is compounded quarterly so, n=4. Substitute all values into the formula,
A
(
t
)
=
P
(
1
+
r
n
)
n
t
A
=
F
u
t
u
r
e
v
a
l
u
e
P
=
P
r
i
n
c
i
p
a
l
A
m
o
u
n
t
n
=
4
(
q
u
a
r
t
e
r
l
y
)
t
=
t
i
m
e
y
e
a
r
s
.
and simplify to get your desired result.
Answer and Explanation:
You have Given
A
=
3
P
n
=
4
t
=
t
i
m
e
r
=
0.07.
Substitute all values into the formula and you have
A
=
P
(
1
+
r
n
)
n
t
3
P
=
P
(
1
+
0.07
4
)
4
⋅
t
3
=
(
1.0175
)
4
t
ln
3
=
ln
(
1.0175
)
4
t
ln
3
=
4
t
⋅
ln
(
1.0175
)
4
t
=
ln
3
ln
(
1.0175
)
t
=
ln
3
ln
(
1.0175
)
⋅
4
≈
15.83
y
e
a
r
s
(use intergrated format)