Question

If you put $2,000 into an interest

bearing account, where interest is
compounded quarterly (4 times a year) at
6%, how long will it take for your money
to triple?
Use A = P(1+5)
Solve for t.
t = [?] years
Round your answer to the nearest tenth.

Answer 1

18.4 years

Explanation:

The compound interest formula:

`A=P(1+(r)/(n) )^(nt)`

For this problem we have

`P= 2000\\r= 0.06\\n= 4\\A= 2000(3)= 6000`

We plug our numbers...

`6,000= 2,000(1+(0.06)/(4) )^(4t) \\`

Then divide

`6,000/2,000=3`

`3= (1.015)^(4t)`

Apply log both sides

`3log=(1.015) 4tlog`

Solve for t

`t= (3log)/((4log(1.015))) =18.4 years`