Question

IMPORTANT: You have $2500 to invest at 6% interest compounded quarterly. For how many years will the money need to be invested for that amount to triple?

Answer 1

\[A=P[1+(r/n)]^{ny}\]

Answer 2

P = Money invested
A = Total amount of money made
R = Interest rate per year
N = Number of times interest is compounded that year
Y = Number of years of that investment

Answer 3

Quarterly rate = .06/4 = .015

we want the accumulation factor to equal 3 after n quarters:

1.015^n = 3

n*ln1.015 = ln3

n = ln3/ln1.015 =73.7887 quarters

divide by 4 and you get 18.447 years = 18 yrs + .447(12) months = 18 yrs, 5+ months (if you will withdraw the money at the end of a month, wait 18 years, 6 months)

Answer 4

Thank you!

Answer 5

Welcome.