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Question: How long does it take an investment to quadruple in value if it earns 4% simple interest per year?

(answer algebraically please)

User Cmal
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1 Answer

1 vote

Answer:

It takes 75 years for the investment to quadruple in value

Explanation:

Simple Interest

This is a simple interest problem.

The simple interest formula is given by:


E = P*I*t

In which E is the amount of interest earned, P is the principal(the initial amount of money), I is the interest rate(yearly, as a decimal) and t is the time.

After t years, the total amount of money is:


T = E + P

In this question:

4% simple interest per year, so I = 0.04.

Quadruple:

t when T = 4P.

The interest earned is:


T = E + P


4P = E + P


E = 3P

Now we find the time.


E = P*0.04*t


3P = P*0.04*t


0.04t = 3


t = (3)/(0.04)


t = 75

It takes 75 years for the investment to quadruple in value

User Azizur Rehman
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