How long will it take for an investment to triple, if interest is compounded continuously at 5%?

Question

It will take __ years before the investment triples. 

Answer 1

Hi Nami.

 

The compound interest formula is:

 

A = Pe^rt

 

Where A is the current value, P is the initial investment, r is the rate, and t is time.

 

If an investment triples, that means A is currently equal to 3*P

 

Your interest rate is 5%, or, 0.05

 

So

 

3P = Pe^0.05*t

 

3 = e^0.05t

 

ln(3) = 0.05*t

 

t = ln(3)/0.05

 

t = ~22 years

 

Hope this helps.