Question

How long does it take a present value amount to triple if the expected return is 13.9%

Answer 1

After 8.444 year amount will be triple

Explanation:

Let the principal amount is P

Amount is triple in some time so

Amount will be equal to
`A=3P`

Expected rate of return
`r=13.9` %

We have to find the time in which amount is triple

We know that
`A=P(1+(r)/(100))^n`

`3P=P(1+(13.9)/(100))^n`

`1.139^n=3`

Taking log both side

`nlog1.139=log3`

`n* 0.0565=0.4771`

n = 8.444 year

So after 8.444 year amonut will be triple